Which of the following is NOT true of the interest rate channel?
A) Bank loans play no special role.
B) The Fed changes the real interest rate which affects the components of aggregate expenditure.
C) Borrowers are indifferent as to how and from whom they raise funds.
D) Alternative sources of funds are not substitutes for each other.

Question

Quizplus · Accepted Answer

Alternative sources of funds are generally considered substitutes for each other, as borrowers can choose between different financing options based on cost and availability.

Which of the Following Is NOT True of the Interest