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

Question

Quizplus · Accepted Answer

The loanable funds model is more useful when we are concerned with the determinants of long-term real interest rates, while the money market model is more useful when we are concerned with the determinants of short-term nominal interest rates.

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