Using the Walras relationship, explain the impact of an excess supply of money on other asset prices (the prices of other ways of holding wealth) in China. Be specific about which assets you are referring to.
Consider the following table with two assets: Money and All Other Assets (e.g., real estate, stocks and bonds).
$\begin{array}{|l|l|l|l|}
\hline & \text { Money } & \text { All Other Assets } & \text { Total Wealth } \
& & (\mathrm{AOA}) & \
\hline \text { Demand } & 800 & 500 & 1300 \
\hline \text { Supply } & 1000 & 300 & 1300 \
\hline \text { Excess DD (+) or } & -200 & +200 &0 \
\mathrm{SS}(-)\
\hline
\end{array}$

Question

Using the Walras relationship, explain the impact of an excess supply of money on other asset prices (the prices of other ways of holding wealth) in China. Be specific about which assets you are referring to.
Consider the following table with two assets: Money and All Other Assets (e.g., real estate, stocks and bonds).
 $\begin{array}{|l|l|l|l|}
\hline & \text { Money } & \text { All Other Assets } & \text { Total Wealth } \
& & (\mathrm{AOA}) &  \
\hline \text { Demand } & 800 & 500 & 1300 \
\hline \text { Supply } & 1000 & 300 & 1300 \
\hline \text { Excess DD (+) or } & -200 & +200 &0 \
\mathrm{SS}(-)\
\hline
\end{array}$

Quizplus · Accepted Answer

The Answer is Excess Supply of Money yields an excess DD in some other market-in China that has been the asset market (as opposed to consumer goods market) leading to pressure on prices to rise of AOA, specifically stock prices and real estate prices and maybe even the price of luxury watches.

Using the Walras Relationship, Explain the Impact of an Excess