The cost of borrowing is commonly referred to as the ________.

Question

Quizplus · Accepted Answer

The cost of borrowing is commonly referred to as the interest rate, which represents the percentage that a borrower has to pay on top of the principal amount to compensate the lender for the risk and opportunity cost of lending the money. A higher interest rate usually implies a higher cost of borrowing, which can discourage borrowing and investment and may lead to lower economic growth and inflation. Factors that influence the interest rate include the supply and demand of credit, the level of inflation and expectations, the central bank's monetary policy, and the overall state of the economy.

The Cost of Borrowing Is Commonly Referred to as the ________