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

question 51

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. 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 marginal cost increases to MC2 but marginal benefit remains unchanged. The new equilibrium level of real money balances will: A)  be equal to £75. B)  be equal to £175. C)  be equal to £200. D)  remain the same, at £100. Suppose marginal cost increases to MC2 but marginal benefit remains unchanged. The new equilibrium level of real money balances will:


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