Q137
The classical theory explained interest as a reward for
A.
Parting with liquidity
B.
Abstinence
C.
Saving
AnswerD.
Inconvenience
Answer: Option C
Solution
Answer: Option C
Solution:
The classical theory explained interest as a reward for Saving. According to the classical theory, interest is the price paid for saving of capital. Like the value of other things, the price of saving is determined by its demand for and supply of savings.