The theory which argues that the risk-free interest rate is determined by the interaction of the supply of savings (coming mainly from households) and the demand for investment capital (principally from business) is known as the:
A) Classical Theory of Interest Rates
B) Liquidity Preference Theory of Interest Rates
C) Loanable Funds Theory of Interest
D) Efficient Markets Theory
E) None of the above

Question

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The Answer of The theory which argues that the risk-free interest rate is determined by the interaction of the supply of savings (coming mainly from households) and the demand for investment capital (principally from business) is known as the:
A) Classical Theory of Interest Rates
B) Liquidity Preference Theory of Interest Rates
C) Loanable Funds Theory of Interest
D) Efficient Markets Theory
E) None of the above

The Theory Which Argues That the Risk-Free Interest Rate Is