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Exhibit: Market for Real Money Balances Based on the Graph

Question 42

Multiple Choice

Exhibit: Market for Real Money Balances Exhibit: Market for Real Money Balances Based on the graph, the equilibrium levels of interest rates and real money balances are: A) r<sub>1</sub> and M<sub>1</sub> / P<sub>1</sub> B) r<sub>2</sub> and M<sub>2</sub> / P<sub>2</sub> C) r<sub>3</sub> and M<sub>2</sub> / P<sub>2</sub> D) r<sub>3</sub> and M<sub>3</sub> / P<sub>3</sub> Based on the graph, the equilibrium levels of interest rates and real money balances are:


A) r1 and M1 / P1
B) r2 and M2 / P2
C) r3 and M2 / P2
D) r3 and M3 / P3

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