1. Science of Economics, chapter 5
Time and interest
Science of Economics, chapter 5

2. What is interest
"Interest" is the premium that is paid in order to shift a purchase from the future to the present day.
Time preference: the preference for goods at the present time relative to those at future times.

3. Which factor? Which factor of production receives interest income?
Land, labor, or capital goods?

4. Any facor.
Interest can be a return to any factor, depending on who does the borrowing.

5. Interest and the money supply.
In the short run, interest rates can be affected by changes in the money supply.
But an expansion of money raises prices,
and when the money expansion stops,
the rate of interest will go back up.

6. The role of interest
In a pure market economy, interest rates ration goods over time between future and present-day uses, enabling those who most urgently want to consume or produce today to do so at a price that reflects preferences over time.