Figure 30-3 on the Following Graph, MS Represents the Money Supply and Supply

question 98

Multiple Choice

Figure 30-3
On the following graph, MS represents the money supply and MD represents money demand.
-Refer to Figure 30-3. At the end of the first year, the relevant money-supply curve was the one labeled MS₂. At the end of the second year, the relevant money-supply curve was the one labeled MS₁. Assuming the economy is always in equilibrium, what was the economy's approximate inflation rate for the second year?

• A)43 percent
• B)30 percent
• C)-30 percent
• D)14.3 percent

---

Definitions:

Decision

The act of making a choice among alternative options based on an evaluation of the potential outcomes.

Compound Sentence

Sentence with two main clauses joined by a comma and conjunction.

Promotion

Activities designed to increase awareness, sales, or acceptance of a product, service, or idea.

Transferring

The act of moving or conveying something from one place, person, or entity to another.