When Determining Interest Rates,the Loanable Funds Model Is More Useful

question 65

Multiple Choice

When determining interest rates,the loanable funds model is more useful when we are concerned with the determinants of the ________,and the money market model is more useful when we are concerned with the determinants of the ________.

• A) long-term real interest rate; short-term nominal interest rate
• B) short-term real interest rate; long-term nominal interest rate
• C) short-term real interest rate; short-term nominal interest rate
• D) long-term real interest rate; long-term nominal interest rate

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Definitions:

Net Accounts Receivable

The amount of money owed to a company by its customers for goods or services provided, after accounting for any allowances for doubtful accounts.

Allowance Method

An accounting technique used to estimate bad debts and adjust accounts receivable to reflect only receivables expected to be collected.

Uncollectible Account

A receivable that a company has deemed unlikely ever to be collected and is therefore written off as a bad debt expense.

Trade Accounts Receivable

Amounts owed by customers to a business, specifically from sales transactions.