The opportunity cost of holding money is determined by ?

Related Mcqs:

1. Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?

   A. increase the money supply because it is now cheaper for banks to borrow from the central bank
   B. decrease the money supply because it will now be more expensive for business firms and consumers to borrow money
   C. Not change the money supply because banks already have excess reserves they cannot lend
   D. Decrease the money supply because it is now cheaper for banks to borrow from the central bank instead instead of buying government securities

2. The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?

   A. Transactions motive
   B. precautionary motive
   C. profit motive
   D. speculation motive

3. When interest rate rise, other things equal, we can expect the quantity of real money holding to ?

   A. fall
   B. increase
   C. not change
   D. None of these

4. The opportunity cost of a good is______________?

   A. the time lost in finding it
   B. the quantity of other goods sacrificed to get another unit of that good
   C. the expenditure on the good
   D. the loss of interest in using savings

5. If a country can produce 10 of product A or 4 of product B the opportunity cost of 1B is ?

   A. 0.4A
   B. 2.5A
   C. 10A
   D. 1B

6. The opportunity cost of a student is____________?

   A. Course fees and rent
   B. A loan from the bank
   C. What the student could have earned in the best job available by not studying
   D. What the student will earn after graduation

7. JCB (Which makes agricultural and construction equipment) has the opportunity to purchase a new factory today that will provide them with a Rs50 million return four years from now If prevailing interest rates are 6 percent, what is the maximum that the project can cost for JCB to be willing to undertake the project ?

   A. Rs 43,456,838
   B. Rs 53,406,002
   C. Rs 34,538,902
   D. Rs 39,604,682

8. If an economy moves from producing 10 units of A and 4 units of B to producing 7 As and 5Bs The opportunity cost of the 5th B is ?

   A. 7As
   B. 10As
   C. 3As
   D. 1A

9. As the wage rate per hour increases, the opportunity cost of leisure ?

   A. remains constant
   B. increases since the cost of forgoing one hour of work increases
   C. decreases since the customer now has more income to spend
   D. may increase of decrease depending on the individual’s preferences.

10. The opportunity cost of one DVD in South Korea is ?

    A. One-half ton of steel
    B. One ton of steel
    C. One and one-half tons of steel
    D. Two tons of steel