Figure 12-2

Figure 12-2. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes.

-Refer to Figure 12-2. If the relevant money-demand curve is the one labeled MD₁, then

A) when the money market is in equilibrium, one dollar purchases one-half of a basket of goods and services.
B) when the money market is in equilibrium, one unit of goods and services sells for 2 dollars.
C) there is an excess demand for money if the value of money in terms of goods and services is 0.375.
D) All of the above are correct.