When the money market is drawn with the value of money on the vertical axis, if the value of money is below the equilibrium level,
A)the price level will rise.
B)the value of money will rise.
C)money demand will shift leftward.
D)money demand will shift rightward.

Question

Quizplus · Accepted Answer

When the value of money is below the equilibrium level, there is excess demand for money, which leads to an increase in the value of money as people are willing to pay more to hold money.

When the Money Market Is Drawn with the Value of Money