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

Question

Quizplus · Accepted Answer

The monetary intertemporal model includes the concept that transactions require both money and transactions services provided by banks. This is emphasized by the existence of both currency and demand deposits, which are used to facilitate transactions between agents in the economy over time. The other options in the question are either incorrect or not relevant to the monetary intertemporal model.

The Monetary Intertemporal Model Contains the Fact That