The money supply curve is downward sloping because as the value of money falls people desire to hold a larger quantity of money.

Question

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When the value of money falls, people's purchasing power decreases. As a result, they need more money to make the same amount of purchases. Therefore, they desire to hold a larger quantity of money to maintain their purchasing power. This leads to an increase in the demand for money, which causes the money supply curve to be downward sloping.

The Money Supply Curve Is Downward Sloping Because as the Value