Cost of borrowing
What Cost of borrowing means in Economics GCSE, as defined for AQA.
Definitions of Cost of borrowing
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Reference: AQA
The expense to producers of taking out loans, which increases when interest rates rise and makes financing new machinery or premises more expensive.
The expense of loans and credit cards, which rises when interest rates rise and discourages borrowing.
What consumers face when taking out a loan, which becomes more expensive when interest rates rise.
Topics that use Cost of borrowing
Related terms
- Business investment
- Compound interest
- Financial institutions
- Financial risk
- Interest rates
- Opportunity cost
- Reward for saving
- Saving
Using Cost of borrowing in the exam
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