Figure 24-2.On the left-hand graph,MS represents the supply of money and MD represents the demand for money; on the right-hand graph,AD represents aggregate demand.The usual quantities are measured along the axes of both graphs.

-Refer to Figure 24-2.Which of the following quantities is held constant as we move from one point to another on either graph?
A) the nominal interest rate
B) the quantity of money demanded
C) investment
D) the expected rate of inflation

Question

Figure 24-2.On the left-hand graph,MS represents the supply of money and MD represents the demand for money; on the right-hand graph,AD represents aggregate demand.The usual quantities are measured along the axes of both graphs.
 
-Refer to Figure 24-2.Which of the following quantities is held constant as we move from one point to another on either graph?
A) the nominal interest rate 
B) the quantity of money demanded 
C) investment 
D) the expected rate of inflation

Quizplus · Accepted Answer

The expected rate of inflation is typically held constant when analyzing graphs related to money demand and interest rates, as it is an external factor not directly influenced by movements along the graph.