Abstinence or Waiting theory of Interest was presented by:

Correct Answer : D.

Abstinence or Waiting theory of Interest ?This theory of interest is associated with the name of Senior. According to the theory Interest is a reward for abstinence. When a person saves money from his income and lends it to somebody else, he in fact makes sacrifice. Sacrifice in the sense, that he abstains from consuming the whole of his income which he could have easily spent. As abstaining from consumption is disagreeable and painful, so the lender must be rewarded for this. Thus, according to Senior, interest is the reward for abstinence from the use of capital on the part of the lender.
This theory is rejected on the ground that saving does not necessarily involve discomfort or sacrifice. A millionaire may save and lend a major part of his income without undergoing any hardship or suffering.