Question

Suppose you have just received $10,000 from a relative. You are trying to decide whether to put the $10,000 in a non-interest-bearing checking account so that you can use it whenever you want or to use it to buy a U.S. Treasury bond. If the interest rate on the bond is 7 percent per year, the opportunity cost of holding the $10,000 as money is a. $700 per year b. $654 per year c. $10,000 per year d. $7 per year

Name: suppose you have just received 10000 from a relative you are trying to decide whether to put the 10000 in a non interest bearing checking account so that you can use it whenever you want or 30295
Uploaded: 2022-05-23T11:23:12-08:00
Duration: 3 min 54 s
Channel: Derrick Danso
Description: suppose you have just received 10000 from a relative you are trying to decide whether to put the 10000 in a non interest bearing checking account so that you can use it whenever you want or 30295

          Suppose you have just received $10,000 from a relative. You are trying to decide whether to put the $10,000 in a non-interest-bearing checking account so that you can use it whenever you want or to use it to buy a U.S. Treasury bond. If the interest rate on the bond is 7 percent per year, the opportunity cost of holding the $10,000 as money is
a. $700 per year
b. $654 per year
c. $10,000 per year
d. $7 per year

suppose you have just received 10000 from a relative you are trying to decide whether to put the 10000 in a non interest bearing checking account so that you can use it whenever you want or 30295

Added by Ana G.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Derrick Danso

05/23/2022

Step 1

In this case, the opportunity cost of holding the $10,000 as money is the interest that could have been earned if the money had been invested in the U.S. Treasury bond. Show more…

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Suppose you have just received $10,000 from a relative. You are trying to decide whether to put the $10,000 in a non-interest-bearing checking account so that you can use it whenever you want or to use it to buy a U.S. Treasury bond. If the interest rate on the bond is 7 percent per year, the opportunity cost of holding the $10,000 as money is a. $700 per year b. $654 per year c. $10,000 per year d. $7 per year