Question #130989
Which one of the following statements is incorrect?
[1] The opportunity cost of holding money balances is the interest that could have been earned if the money had been used to purchase interest-bearing assets instead.
[2] The quantity of money demanded for transaction purposes depends on the interest rate.
[3] The demand for money as an asset is also called the speculative demand for money.
[4] The quantity of money demanded for speculative purposes is negatively related to the interest rate.
[1] The opportunity cost of holding money balances is the interest that could have been earned if the money had been used to purchase interest-bearing assets instead.
[2] The quantity of money demanded for transaction purposes depends on the interest rate.
[3] The demand for money as an asset is also called the speculative demand for money.
[4] The quantity of money demanded for speculative purposes is negatively related to the interest rate.
Expert's answer
1) The opportunity cost of holding money balances is the interest that could have been earned if the money had been used to purchase interest-bearing assets instead.
