Question

Which of the following is​ true? A. The loanable funds model is essentially a model that determines the long term nominal rate of interest. B. The loanable funds model is essentially a model that determines the short term real rate of interest. C. The money market model is essentially a model that determines the short term real rate of interest. D. The money market model is essentially a model of that determines the short term nominal rate of interest.

Answer 1

C) The money market model is essentially a model that determines the short-term nominal rate of interest.

Step-by-step explanation:

The money market model is used by macroeconomics to determine a country's equilibrium rate between the quantity supplied of money and the quantity demanded of money. The equilibrium price of money is expressed by the nominal interest rate.

Answer 2

Answer: The correct answer is "D. The money market model is essentially a model of that determines the short term nominal rate of interest.".

Explanation: The statement "The money market model is essentially a model of that determines the short term nominal rate of interest." is TRUE because the money market model is mainly used in the short term to determine what the NOMINAL interest rate is.