2. Consider the money market model. Suppose that the current price is higher than the equilibrium price. Answer if the money demand is greater than or smaller than the money supply and how the value of money will change in the adjustment toward the equilibrium: Decrease or Increase. Money demand: Value of money:

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Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
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2. Consider the money market model. Suppose that the current price is higher than the equilibrium price. Answer
if the money demand is greater than or smaller than the money supply and how the value of money will change in
the adjustment toward the equilibrium: Decrease or Increase.
Money demand:
Value of money:

 

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