When the Money Market Is Drawn with the Value of Money

question 231

Multiple Choice

When the money market is drawn with the value of money on the vertical axis,an increase in the money supply causes the equilibrium value of money

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

---

Definitions:

Receiving Annually

Refers to receiving a particular sum or type of benefit every year.

Perpetually

Continuing forever or for an indefinite period without anticipated termination.

Cash Flow

The total sum of cash and cash-equivalents that flows in and out of a company.

Present Value

The worth at present of a future money amount or cash flow sequences, evaluated using a certain rate of return.