Which of the following is true? A. The loanable funds model is essentially a model that determines the long term nominal rate of interest. B. The loanable funds model is essentially a model that determines the short term real rate of interest. C. The money market model is essentially a model that determines the short term real rate of interest. D. The money market model is essentially a model of that determines the short term nominal rate of interest.

The correct answer is "D. The money market model is essentially a model of that determines the short term nominal rate of interest.".

Explanation: The statement "The money market model is essentially a model of that determines the short term nominal rate of interest." is TRUE because the money market model is mainly used in the short term to determine what the NOMINAL interest rate is.

C) The money market model is essentially a model that determines the short-term nominal rate of interest.

Explanation:

The money market model is used by macroeconomics to determine a country's equilibrium rate between the quantity supplied of money and the quantity demanded of money. The equilibrium price of money is expressed by the nominal interest rate.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

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