Principles of Macroeconomics / Unit 12 MAC 1107 short lesson, about 20 seconds
Why Hold Money at All
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The idea
Money pays little or no interest, and bonds pay more. So holding money has a cost, and the question is why anyone holds it. The answer is that money can be spent and bonds must first be sold.
In practice
The choice is between liquidity now and interest later.
Where people slip
The cost of holding money is the interest given up, not a fee.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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