Read the passage then answer the questions set on it. Price of Money The interest rate is, first and foremost, a price - the price of money loaned or borrowed. In this respect, the interest rate (or rates, since there are several kinds) behaves like the price of any commodity - it rises when money is scarce, and falls when money is plentiful. Let's explain that a little more. Money is required by everyone - by ordinary consumers to purchase the necessities of life and to pay bills; by businesses to purchase equipment and materials, pay wages, and meet other business expenses; and by Government to finance public spending. Much of this money is obtained by working for wages, or obtaining other forms of income such as rent from land, and profits from business activities, or in the case of Government, from taxes and other revenues. However, additional money is always needed to purchase a house or home appliances; a business, to build a new factory. In such cases, the only alternative is to borrow - and of course, financial institutions, such as commercial banks, mortgage companies, building societies, merchant banks, development banks and leasing companies, are in business to fill this need. The savers in these institutions provide the necessary supply of funds through their deposits. The financial institution lends the money to the borrower at a price - interest. The savers, of course, are also rewarded with interest for allowing the financial institution to lend their