What are three reasons that banks charge interest on loans?
What will be an ideal response?
Banks charge interest on loans to compensate for inflation, to compensate for default risk, and to compensate for the opportunity cost of waiting to spend your money.
Economics
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Most empirical data support the idea that money demand depends on the interest rate.
Answer the following statement true (T) or false (F)
Economics
In the Cournot duopoly model, each firm assumes that
A) rivals will match price cuts but will not match price increases. B) rivals will match all reasonable price changes. C) the price of its rival is fixed. D) the output level of its rival is fixed.
Economics