Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 16 - Rent, Interest, and Profit - Discussion Questions - Page 378: 5


The answer is below.

Work Step by Step

This is essentially the interest rate where the supply and demand curve for money intersect. In other words, if a lot of people want money, the interest rate will be higher, while if a lot of people want to lend money, it will be lower in general. It is important to note, however, that the US government exerts a large amount of control over the interest rates.
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