Posted by Johnny on Monday, February 15, 2010 at 4:00am.
Make sure you know the concise meaning of reward in economy. Reward means your benefit, to speak briefly. Personally, I'd rate your idea as correct because of the possibility to regard the problem from two perspectives: 1.) Business opens up an account for savings 2.) Business is offered credits by banks. It does depend on the point of view to elaborate on.
dongo is right, but I thought I would add this to it:
1)Banks don't get interest; they give it to businesses and the general public because the infaltion rate exists. Banks can only get the interest payments that businesses make after they get loans.
Besides that interest, businesses get more than they put in with their capital, meaning that they gain a different kind of interest. They don't necessarily put this in banks.
When granting credits to enterprises, banks will want to have s.th. in return. This is called interest as well. Inflation might also be a trigger for an increasing interest rate, however, it is surely not the main attractor for banks. Banks themselves constitute enterprises as well, interested in making profit.
Related Questions
11th grade economics - Since capital are means of production e.g. machinery, how...
A.P. Economics (Please check if I'm right) - Leaving class today, you decide...
english - when writing the word GRADE ONE in a sentence...would it be Grade One...
11th grade - The students of litchfield High school are in grades 9,10,11,12. Of...
business economics - explain using illustrations how the study of business ...
11th grade - CAROLINA, 1670-1760 TO WHAT EXTENT WAS ECONOMICS THE BASIS FOR ...
Business Law - On June 1, Jason Thomas placed an announcement in The Local ...
Economics - When the Bank of England cut interest rates does that mean inflation...
Economics - 12. The main economic variables that affect business cycles include ...
economics - A Aircraft company's capital structure is made up of 40% debt ...
For Further Reading
