The model in which money demand and supply determine the nominal interest rate is known as the
A)liquidity-preference model.
B)ATM model.
C)aggregate money model.
D)monetarist model.

Question

Quizplus · Accepted Answer

The liquidity-preference model, also known as the Keynesian theory of interest, explains how the equilibrium interest rate is determined by the supply and demand for money in the economy. This model was developed by John Maynard Keynes and is a core principle in macroeconomics. The other options (ATM model, aggregate money model, and monetarist model) are not recognized or relevant models in the field of macroeconomics.

The Model in Which Money Demand and Supply Determine the Nominal