Use the Table Below to Answer the Following Questions

question 80

Multiple Choice

Use the table below to answer the following questions.
Table 24.4.1

-Refer to Table 24.4.1.The spreadsheet provides information about the demand for money in Minland.
Column A is the nominal interest rate,r.Columns B and C show the quantity of money demanded at two different levels of real GDP: Y? is $10 billion and Y? is $20 billion.
The quantity of money is $3 billion.Real GDP is $20 billion.
If the interest rate is greater than 4 percent a year

• A)people buy bonds, the price of a bond rises, and the interest rate rises.
• B)people buy bonds, the price of a bond rises, and the interest rate falls.
• C)people sell bonds, the price of a bond falls, and the interest rate rises.
• D)people sell bonds, the price of a bond falls, and the interest rate falls.
• E)the demand for money decreases.

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Definitions:

Marginal Private Benefit

The additional benefit received by a consumer or producer from consuming or producing one more unit of a good or service.

Marginal Social Cost

The total cost to society of producing an additional unit of a good, including both the private costs borne by the producer and any external costs inflicted on others.

Social Optimum

The most efficient allocation of resources in a society, achieving the best outcomes for social welfare.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be used by anyone without preventing others from using them as well.