Question

What is the cost of money?

a. the smoothing out of fluctuations in the market
b. the economy’s use of open market operations
c. the price of the interest rate
d. the bank’s use of money creation

Answer 1

Cost of money is the price of interest rate,

Answer 2

The answer is C.

Cost of money is the price of interest rate,

It could also be defined as The ammount that you could get if you invest that money.

So if you have 1 million dollar just laying around without doing nothing, it actually cost you some money. Because if you invest it, it could earn you some profit