The theory which states that interest equilibrium is the result of demand and supply in trading markets, is classified as __________?
Correct answer: D. loanable funds theory
- A. saving fund theory
- B. constant funds
- C. borrowed theory
- D. loanable funds theory
Explanation
The loanable funds theory explains the equilibrium interest rate through the interaction of the supply of and demand for funds in financial markets. The other labels are not the standard name of this theory.
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