The capital market refers to money made available by banks and other lenders as loans, primarily to business firms but to consumers as well. The interest rate charged by lenders is really

Question

Quizplus · Accepted Answer

The interest rate charged by lenders is the price they charge for the money they lend, making option A the correct choice. The other options are incorrect because the capital market is separate from the stock market and the interest rate is not a form of collective decision making. Additionally, while the fairness of the interest rate may be debatable, the statement that it is fair for businesses but unfair to consumers is too generalizing and not necessarily accurate.

The Capital Market Refers to Money Made Available by Banks