Figure 17-2

question 291

Multiple Choice

Figure 17-2. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes.
-Refer to Figure 17-2. If the relevant money-demand curve is the one labeled MD₁, then

• A)when the money market is in equilibrium, one dollar purchases one-half of a basket of goods and services.
• B)when the money market is in equilibrium, one unit of goods and services sells for 2 dollars.
• C)there is an excess demand for money if the value of money in terms of goods and services is 0.375.
• D)All of the above are correct.

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