Question

When the market for money is drawn with the value of money on the vertical axis...

When the market for money is drawn with the value of money on the vertical axis and the quantity of money on the horizontal axis, the price level increases if money demand shifts

a. right and decreases if money supply shifts right.

b. right and decreases if money supply shifts left.

c. left and decreases if money supply shifts right.

d. left and decreases if money supply shifts left.

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Answer #1

OPTION A IS CORRECT

When the quantity of money demanded increase, the price of money (interest rates) also increases, and causes the demand curve to increase and shift to the right.

​​​​​when money supply increase the price of money(interest rate ) decerease , and cause the money supply to shift right .

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