Which of the following will increase the opportunity cost of holding cash? Which will reduce it? Explain.

a. In order to attract new customers, the new internet payment firm, PayBuddy, announces it will pay 0.5% interest on cash balances in a PayBuddy account.

b. To attract more deposits, banks raise the interest paid on sixmonth CDs.

c. In an effort to increase holiday sales, stores offer one-year zero-interest deals on purchases made with store credit cards.