The Interest Rate Compensates

question 84

Multiple Choice

The interest rate compensates

• A)bankers for their time spent on paperwork
• B)borrowers for their increased consumption today
• C)savers for consumption forgone today
• D)consumers for more consumption today
• E)the Fed for its efforts to control the money supply

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Definitions:

Cash Discount

A reduction in invoice amount by a seller as an incentive for early payment by the buyer.

Net 30

A payment term that indicates the full payment is due 30 days from the invoice date.

Wholesalers

Businesses that buy goods in bulk from manufacturers to resell them, typically to retailers, in smaller quantities.

Retail List Price

The price at which a product is sold to the public, suggested by the retailer.