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May 23, 2015

Homework Help: Econ

Posted by Psharp on Wednesday, December 12, 2007 at 3:45pm.

As the interest rate increases, the opportunity cost of money:
A. Increases for both lender and borrower.
B. Increases for the borrower but not the lender.
C. Decreases for both lender and borrower.
D. Decreases for the borrower but not the lender.


My answer - D (Because, As the interest rate increases, the opportunity cost of holding money increases, and people choose to hold less money)

Am I right?????

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