The concept of 'Opportunity Cost of Holding Money' refers to: MCQ with Answer and Explanation

Question
The concept of 'Opportunity Cost of Holding Money' refers to:
A. The cost of banking services only
B. The interest income forgone by holding cash instead of interest-bearing assets
C. The cost of producing goods and services
D. The cost of printing currency notes
Answer: Option B
Solution (By JKSSB Mock Tests)
The opportunity cost of holding money is the interest that could have been earned by holding bonds or other interest-bearing assets instead of cash.
This question belongs to: Economy GK Economy Set 1
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Practice More Economy Set 1 Questions

Question #1
The 'occupational safety, health and working conditions code' was passed in which year?
A. 2020
B. 2022
C. 2021
D. 2019
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Correct Answer: Option A

Explanation:
The OSH Code was passed in 2020.
This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is NOT a feature of the Keynesian theory?
A. Possibility of underemployment equilibrium
B. Emphasis on effective demand
C. Importance of government intervention
D. Wage-price flexibility ensuring full employment
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Correct Answer: Option D

Explanation:
Keynes rejected the classical assumption of wage-price flexibility leading to automatic full employment. He argued that underemployment equilibrium is possible.
This question belongs to: Economy GK Economy Set 1
Question #3
The 'Interim Budget' is presented when:
A. elections are near or the government is in transition
B. there is a financial emergency
C. the government has full term
D. there is a war
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Correct Answer: Option A

Explanation:
An interim budget is presented before elections or a transition period.
This question belongs to: Economy GK Economy Set 1
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