The higher and more unpredictable the changes in the monetary unit, the
A)lower the opportunity cost of using it as a medium of exchange.
B)lower the opportunity cost of using it as a store of value.
C)higher the opportunity cost of using it as a store of value.
D)less likely barter exchange will replace it.
E)lower the opportunity cost of using it as a standard of deferred payment.

Question

Quizplus · Accepted Answer

High and unpredictable changes in the monetary unit make it more risky to use as a store of value since its purchasing power can rapidly decline. This increases the opportunity cost of holding money, as individuals may opt to invest in other assets to preserve their wealth.

The Higher and More Unpredictable the Changes in the Monetary