The correct answer is: C. Interest rate.
The opportunity cost of retaining money is the interest that you could have earned if you had invested the money instead of keeping it in cash. The interest rate is the percentage of the principal that you will earn on your investment over a period of time. The higher the interest rate, the higher the opportunity cost of retaining money.
The inflation rate is the rate at which prices for goods and services are rising. When the inflation rate is high, the value of money is decreasing. This means that if you keep your money in cash, it will be worth less in the future.
The gross product level is the total value of all goods and services produced in a country in a given year. The gross product level does not affect the opportunity cost of retaining money.
The discount rate is the rate at which future cash flows are discounted to their present value. The discount rate is used to calculate the present value of an investment. The higher the discount rate, the lower the present value of an investment.
In conclusion, the opportunity cost of retaining money is determined by the interest rate. The higher the interest rate, the higher the opportunity cost of retaining money.