On my book it says that net interest is "The interest domestic businesses pay minus the interest they receive, plus interest earned from foreigners."

But how can businesses receive interest?

  • $\begingroup$ Why shouldn't they receive interest? What do you think is preventing it? $\endgroup$ – EnergyNumbers Dec 10 '16 at 6:46
  • $\begingroup$ I thought only households receive interest because they deposit their savings in financial institutions. Thats why im confused. I mean, for example, does Pepsi receive interest or is it only banks? $\endgroup$ – John Richard Dec 10 '16 at 11:13
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    $\begingroup$ Where do you think businesses deposit their cash? $\endgroup$ – EnergyNumbers Dec 11 '16 at 11:11

Banks and other financial institutions are businesses.

  • $\begingroup$ My book doesn't even mention that, thanks. $\endgroup$ – John Richard Dec 10 '16 at 11:13

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