Figure 31-2 In the graph, MS represents the money supply and MD represents money demand. The vertical axis is the value of money measured as 1/P and the horizontal axis is the quantity of money. Money Supply 0.6 0.3 5000 MD₂ MD, Refer to Figure 31-2. If the relevant money-demand curve is the one labeled MD1, then the equilibrium value of money is 0.3 and the equilibrium price level cannot be determined from the graph. 0.3 and the equilibrium price level is 3.3. 3.3 and the equilibrium price level is 0.3. 3.3 and the equilibrium price level cannot be determined from the graph.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Figure 31-2
In the graph, MS represents the money supply and MD represents money demand. The vertical axis is the value of money measured as 1/P and the horizontal axis is the quantity of money.
Money Supply
0.6
0.3
5000
MD₂
MD,
Refer to Figure 31-2. If the relevant money-demand curve is the one labeled MD1, then the equilibrium value of money is
0.3 and the equilibrium price level cannot be determined from the graph.
0.3 and the equilibrium price level is 3.3.
3.3 and the equilibrium price level is 0.3.
3.3 and the equilibrium price level cannot be determined from the graph.
Transcribed Image Text:Figure 31-2 In the graph, MS represents the money supply and MD represents money demand. The vertical axis is the value of money measured as 1/P and the horizontal axis is the quantity of money. Money Supply 0.6 0.3 5000 MD₂ MD, Refer to Figure 31-2. If the relevant money-demand curve is the one labeled MD1, then the equilibrium value of money is 0.3 and the equilibrium price level cannot be determined from the graph. 0.3 and the equilibrium price level is 3.3. 3.3 and the equilibrium price level is 0.3. 3.3 and the equilibrium price level cannot be determined from the graph.
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