Which statement is NOT true of the loanable funds theory?
A) Views the level of interest rates as resulting from factors that affect the supply and demand for loanable funds.
B) Categorizes financial market participants as net suppliers or demanders of funds.
C) Is a model that is rarely used to explain interest rates and interest rate movement.
D) Is a theory of interest rate determination that views equilibrium interest rates in financial markets as a result of the supply and demand for loanable funds.
Correct Answer:
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