Refer to the Graph Above

question 168

Multiple Choice

Refer to the graph above. If the supply of money was $200 billion, the interest rate would be:

• A) 1 percent
• B) 2 percent
• C) 3 percent
• D) 4 percent

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Definitions:

Marginal Cost

The cost incurred by producing one more unit of a good or service.

Socially Optimal Price

A price level for goods or services that considers the wellbeing of society as a whole, often factoring in externalities.

Deadweight Loss

The diminishing of economic efficiency when equilibrium in the free market for a product or service is not attained.

Benevolent

Showing kindness or goodwill, often characterized by acts of generosity or concern for others.