In the United States economy, the interest rate is: a. the equilibrium cost of borrowing capital. b. determined by the supply and demand for loanable investment funds. C. controlled to some degree by the Federal Reserve System. d. a, b, and c are correct.

In the United States economy, the interest rate is: a. the equilibrium cost of borrowing capital. b. determined by the supply and demand for loanable investment funds. C. controlled to some degree by the Federal Reserve System. d. a, b, and c are correct.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 3MC: The system of using a monetary unit, such as the US dollar, to value the transaction is known as...

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Concept explainers

Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.

Question

In the United States economy, the interest
rate is:
a. the equilibrium cost of borrowing capital.
b. determined by the supply and demand
for loanable investment funds.
c. controlled to some degree by the Federal
Reserve System.
d. a, b, andc are correct.

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