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

question 83

Multiple Choice

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

• A)The equilibrium value and equilibrium quantity of money both increase.
• B)The equilibrium value and equilibrium quantity of money both decrease.
• C)The equilibrium value increases, while the equilibrium quantity of money decreases.
• D)The equilibrium value decreases, while the equilibrium quantity of money increases.

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