ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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% Charged to a business or consumer for borrowing money
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How interested a company is in buying a machine
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% of a profit that must go to a company
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None of the above
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Detailed explanation-1: -An interest rate tells you how high the cost of borrowing is, or high the rewards are for saving. So, if you’re a borrower, the interest rate is the amount you are charged for borrowing money, shown as a percentage of the total amount of the loan.
Detailed explanation-2: -Annual Percentage Rate (APR) is the interest charged for borrowing that represents the actual yearly cost of the loan expressed as a percentage.
Detailed explanation-3: -Higher interest rates make it more costly for businesses to borrow money through loans and lines of credit and affect how much interest you pay on your credit card or home purchases. The impact of this generally ripples through the overall economy.
Detailed explanation-4: -Consumer interest is interest charged on consumer credit accounts such as personal loans, automobile loans and credit card debt. Unlike mortgage interest and some interest charged on student loans, consumer interest from personal loans, credit cards, and other debt is a nondeductible tax expense.