In the money market, in the short run if the quantity of money exceeds the quantity of money demanded, then to achieve equilibrium the
A)inflation rate increases.
B)demand for money increases.
C)price level rises.
D)nominal interest rate falls.
E)supply of money increases.

Question

Quizplus · Accepted Answer

In the short run, if the quantity of money exceeds the quantity of money demanded, the nominal interest rate falls to encourage people to hold more money, thus restoring equilibrium.

In the Money Market, in the Short Run If the Quantity