What is the cost of money?

the smoothing out of fluctuations in the market

the economy’s use of open market operations

the bank’s use of money creation

the price of the interest rate

1 answer

The cost of money generally refers to the price of borrowing money, which is typically represented by the interest rate. So, in this context, the correct answer would be:

the price of the interest rate

This reflects how much it costs to access and use borrowed funds. Higher interest rates indicate a higher cost of money, while lower rates indicate a lower cost.