Figure 30-3

question 245

Multiple Choice

Figure 30-3.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes.
-Refer to Figure 30-3.If the relevant money-supply curve is the one labeled MS₁,then the equilibrium price level is

• A)0.5 and the equilibrium value of money is 2.
• B)2 and the equilibrium value of money is 0.5.
• C)0.5 and the equilibrium value of money cannot be determined from the graph.
• D)2 and the equilibrium value of money cannot be determined from the graph.

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Definitions:

Cash Discount

A deduction from the stated price of goods or services offered to buyers as an incentive for early payment.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including interest rates, repayment schedule, and other stipulations guiding the borrowing.

Merchandise Inventory

Goods or stock that a retailer, wholesaler, or distributor holds for the purpose of resale to customers.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a refund or credit.