If real money demand doubles while the nominal money supply is unchanged,what happens to the price level?

Question

Quizplus · Accepted Answer

When real money demand doubles while the nominal money supply remains unchanged, it implies that for the same amount of money in the economy, people now want to hold twice as much real balance. This can only happen if the value of money increases, meaning that each unit of currency now buys more goods and services than before, which is equivalent to saying that the price level falls. Hence, the price level falls by one-half to adjust for the doubled demand in real terms.

If Real Money Demand Doubles While the Nominal Money Supply