When the market for money is drawn with the value of money on the vertical axis and the quantity of money on the horizontal axis, long-run equilibrium is obtained when the quantity demanded and quantity supplied of money are equal due to adjustments in
A)the value of money.
B)real interest rates.
C)nominal interest rates.
D)the money supply.

Question

Quizplus · Accepted Answer

In the context of the money market, long-run equilibrium is achieved when the quantity of money demanded equals the quantity supplied, and this balance is primarily adjusted through changes in the value of money. The value of money reflects its purchasing power, which adjusts to equilibrate the demand and supply for money over the long run.

When the Market for Money Is Drawn with the Value