When the Money Market Is Depicted in a Diagram with the Value

question 185

Multiple Choice

When the money market is depicted in a diagram with the value of money on the vertical axis, which statement best describes the long-run effects of an increase in money supply?

• A) The price level and the quantity of money demanded increases.
• B) The price level increases, but the quantity of money demanded decreases.
• C) The price level decreases, but the quantity of money demanded increases.
• D) The price level and the quantity of money demanded decreases.

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