Q187
According to Keynes, interest is a payment for
A.
Use of durable goods
B.
Use of capital
C.
Use of money
AnswerD.
Use of land
Answer: Option C
Solution
Answer: Option C
Solution:
According to Keynes, the rate of interest is purely “a monetary phenomenon.” Interest is the price paid for borrowed funds. People like to keep cash with them rather than investing cash in assets. Thus, there is a preference for liquid cash.