1. The purpose of interest payments on savings or on loans is to: a. Cover increases in purchasing power due to


1. The purpose of interest payments on savings or on loans is to:
a. Cover increases in purchasing power due to inflation, to penalize the saver or lender for forgoing current spending, and to reward the lender for taking a risk that the money may not be repaid.
b. Cover losses in purchasing power due to deflation, to penalize the saver or lender for forgoing current spending, and to reward the lender for taking a risk that the money may not be repaid.
c. Cover losses in purchasing power due to inflation, to reward the saver or lender for forgoing current spending, and to reward the lender for taking a risk that the money may not be repaid.
d. Cover increases in purchasing power due to disinflation, to reward the saver or lender for forgoing current spending, and to reward the lender for taking a risk that the money may not be repaid


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