The Following Graph Shows the Marginal Cost (MC) and Marginal

question 74

Multiple Choice

The following graph shows the marginal cost (MC) and marginal benefit (MB) of holding real money balances. The market is initially in equilibrium at £100. Refer to the graph to answer the question. Suppose the interest rate on bonds increases. Other things remaining the same, which of the following is true?

• A) The new equilibrium level of real money balances will be equal to £175.
• B) The marginal cost line will move from MC1 to MC2.
• C) The new equilibrium level of real money balances will be equal to £200.
• D) The marginal benefit line will move from MB1 to MB2.

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Definitions:

Warehouse

A large building where goods are stored before they are sold or distributed to stores or customers.

Food Deserts

Urban or rural areas with limited access to affordable and nutritious food.

Socioeconomic

Pertaining to or involving both social and economic factors, often used to describe the social standing or class of an individual or group based on income, education, and occupation.

Fresh Food

Food that is not preserved by canning, freezing, or any form of processing and is in its natural state or has minimal processing.