Figure 30-2

question 128

Multiple Choice

Figure 30-2. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes.
-Refer to Figure 30-2. At the end of 2009 the relevant money-demand curve was the one labeled MD2. At the end of 2010 the relevant money-demand curve was the one labeled MD1. Assuming the economy is always in equilibrium, what was the economy's approximate inflation rate for 2010?

• A) -43 percent
• B) -57 percent
• C) 57 percent
• D) 75 percent

---

Definitions:

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a particular price over a given period of time.

Marginal Revenue

The extra revenue gained by the sale of an additional unit of a product or service.

Total Revenue

The total amount of income generated by the sale of goods or services by a company.

Average Cost

The total cost of production divided by the quantity of output produced, representing the cost per unit of output.