Among the source of transactions costs associated with reducing average money balances are:
A)foregone interest payments.
B)the time spent going to the bank or ATM.
C)opportunity costs.
D)all of the above.

Question

Quizplus · Accepted Answer

All of the options mentioned are sources of transactions costs associated with reducing average money balance. Foregone interest payments represent an opportunity cost of holding money in a low-interest-bearing account rather than investing it elsewhere. The time spent going to the bank or ATM represents the time cost of reducing the money balance. Opportunity costs refer to the missed opportunities for using the money held as cash for some other purposes.

Among the Source of Transactions Costs Associated with Reducing Average