What factors affect the cost of money

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Reference no: EM13880914

What factors affect the cost of money? Use at least one outside source. You may form your own opinions as well but support them with research. I need examples to understand the four factors please.

The four factors that affect the cost of money are:

1. Production Opportunities- the returns available within an economy from investment in productive (cash producing) assets.

2. Time Preferences for Consumption- the preferences of consumers for current consumption as opposed to saving for future consumption.

3. Risk- the chance that a financial asset will not earn the return promised.

4. Inflation- the tendency of prices to increase over time.

Reference no: EM13880914

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