When a graph of the money market is drawn with the value of money on the vertical axis, which of the following will happen 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 left.
D)Money demand will shift right.

Question

Quizplus · Accepted Answer

When the value of money is below the equilibrium level, there is excess demand for money, leading to an increase in the value of money as people are willing to hold more money at a higher value.

When a Graph of the Money Market Is Drawn with the Value