Which of the Following Statements About Interest Rate Determination Is

question 82

Multiple Choice

Which of the following statements about interest rate determination is most accurate?

• A) In both the long run and the short run,the interest rate is determined in the market for loanable funds.
• B) In both the long run and the short run,the interest rate is determined in the money market.
• C) In the short run the interest rate is determined in the market for loanable funds,and in the long run it is are determined in the money market.
• D) In the short run the interest rate is determined in the money market,and in the long run it is determined in the market for loanable funds.
• E) The interest rate is determined through an interaction between the money market and the loanable funds market.

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Definitions:

Regression

The retreat of the sea from land areas and evidence of such withdrawal.

Sandstone

A sedimentary rock composed mainly of sand-sized mineral particles or rock fragments.

Avalanche

A rapid flow of snow, ice, and possibly debris down a mountain slope, often triggered by factors like weather, temperature, and disturbances.

Imbricated Clasts

Rock fragments arranged in a way that they overlap each other like shingles on a roof, typical in sediment deposited by flowing water.