Asked by Shavona Prater on Jun 07, 2024
Verified
The __________ is the price of money (loanable funds) .
A) wage
B) rent
C) demand
D) interest rate
Interest Rate
The percent of principal charged by the lender for the use of its money or the rate earned on deposits.
Loanable Funds
The funds available for borrowing in the financial markets, derived from the savings of individuals and institutions.
- Comprehend the function of interest rates and their response to fluctuations in the availability of loanable funds.
Verified Answer
MH
Mahmoud HamedJun 12, 2024
Final Answer :
D
Explanation :
Interest rate is the price of loanable funds, representing the cost of borrowing or the benefit of saving. A higher interest rate means borrowing is more expensive and saving is more rewarding, whereas a lower interest rate means borrowing is cheaper and saving is less attractive.
Learning Objectives
- Comprehend the function of interest rates and their response to fluctuations in the availability of loanable funds.
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