In the short run, the interest rate is determined in the _____ market.
A) stock
B) money
C) loanable funds
D) commodity

Question

Quizplus · Accepted Answer

In the short run, the interest rate is primarily determined in the money market, which determines the supply and demand for short-term loans and investments. The loanable funds market is more relevant in the long run, as it governs the supply and demand for savings and investment funds over a longer time horizon. The stock market and commodity markets may indirectly influence interest rates, but they are not directly responsible for setting them.

In the Short Run, the Interest Rate Is Determined in the _____