Different Theories of the Interest Rate Are Useful for Different

question 10

Multiple Choice

Different theories of the interest rate are useful for different purposes. When thinking about the short-run determinants of interest rates, it is best to keep in mind:

• A) the loanable funds theory.
• B) the liquidity preference theory.
• C) the classical economic theory.
• D) the price level theory.

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Definitions:

Humans

Homo sapiens, the species of bipedal primates to which all modern human beings belong, characterized by complex language, social structures, and the ability to use tools.

Five-factor Model

A model proposing that five broad dimensions underlie all human personality traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Conscientiousness

An attribute in an individual's character that involves being structured, dependable, and possessing a serious dedication to duties.

Dependable

Capable of being relied on; trustworthy or reliable.