Refer to Figure 5.1 for the Following Questions

question 17

Multiple Choice

Refer to Figure 5.1 for the following questions.
Figure 5.1

-Refer to Figure 5.1. An increase in the supply of loanable funds could result in which of the following combinations of the real interest rate and quantity of loanable funds at a new equilibrium?

• A)The real interest rate is 5%, and the quantity of loanable funds is $150 million.
• B)The real interest rate is 5%, and the quantity of loanable funds is $90 million.
• C)The real interest rate is 3%, and the quantity of loanable funds is $150 million.
• D)The real interest rate is 3%, and the quantity of loanable funds is $90 million.

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Definitions:

AVC

Average Variable Cost; the cost of variable inputs divided by the quantity of output produced.

AFC

Average Fixed Cost, which is the fixed costs of production divided by the quantity of output produced.

MC

Marginal Cost, the change in total cost that arises when the quantity produced is incremented by one unit.

ATC

Average Total Cost refers to the total cost per unit of output, calculated by dividing the total cost of production by the number of units produced.