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MCD2090 Macroeconomics - Trimester 3 - 2025

Single choice

Economists use _____ as a model to explain how savers and borrowers come together to determine the equilibrium rate of interest.

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To tackle the question, I’ll compare what each option represents in the context of how savers and borrowers interact to determine interest rates. Option a: the financial system. While the financial system encompasses banks, markets, and institutions that channel funds, it is a broad umbrella term and not the specific model that directly shows how savers and borrowers come together to set ......Login to view full explanation

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