Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 2 - The Key Principles of Economics - Exercises - 2.1 The Principle of Opportunity Cost - Page 43: 1.3

Answer

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Work Step by Step

The value of a collectible is not tied to the interest rate. If the interest rate rises, more money would be earned by selling the collectible and earning interest on the sale price. This increases the opportunity cost of holding the collectible.
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