Which of the following statements describes a role performed by the rate of interest in the economy?
A) Facilitates that current savings will flow into investment to promote economic growth
B) Allocates the available supply of credit, generally providing loanable funds to projects bearing the highest expected returns
C) Brings the nation's money supply into balance with the demand for money
D) Serves as a tool of government economic policy
E) All of the above represent roles of the rate of interest in the economy

Question

Quizplus · Accepted Answer

The rate of interest in the economy plays multiple roles: it encourages savings to flow into investments, thereby promoting economic growth (A); it helps in allocating credit to high-return projects (B); it balances the money supply with the demand for money (C); and it acts as an instrument for government economic policy (D).

Which of the Following Statements Describes a Role Performed by the Rate