The monetary intertemporal model contains the fact that
A)the foreign sector does not matter.
B)the Bank of Canada supplies money.
C)interest rates are determined by the federal government.
D)interest rates are determined by the chartered banks.
E)transactions require money and transactions services supplied by banks.

Question

Quizplus · Accepted Answer

The monetary intertemporal model recognizes that transactions require money and transaction services supplied by banks. This emphasizes the importance of financial intermediaries in the economy rather than just focusing on the supply of money by the central bank (Bank of Canada). Additionally, interest rates are not determined by the federal government or chartered banks in this model, but rather are determined by the market forces of supply and demand for loanable funds. The foreign sector may also play a role in this model depending on the specific scenario being analyzed.

The Monetary Intertemporal Model Contains the Fact That