Figure 4-5

-In Figure 4-5 above,at what income would the interest rate that brings about money market equilibrium cause unwanted inventories of commodities to accumulate?
A)YA
B)YB
C)YE
D)YC

Question

Figure 4-5
 
-In Figure 4-5 above,at what income would the interest rate that brings about money market equilibrium cause unwanted inventories of commodities to accumulate?
A)YA 
B)YB 
C)YE 
D)YC

Quizplus · Accepted Answer

At income level YC, the interest rate is too high, leading to reduced investment and consumption, causing unwanted inventories to accumulate as demand falls short of supply.

Figure 4-5 -In Figure 4-5 Above,at What Income Would the Interest Rate