Question

When the money market is drawn with the value of money on the vertical axis, as the price level decreases, the value of money

a. increases, so the quantity of money demanded increases.
b. increases, so the quantity of money demanded decreases.
c. decreases, so the quantity of money demanded decreases.
d. decreases, so the quantity of money demanded increases.

Answer 1

d. decreases, so the quantity of money demanded increases.

Step-by-step explanation:

(1) (d) When the money market is drawn with the value of money on the vertical axis, an increase in the money supply: increases the price level and decreases the value of money.

There are several examples in the history where the value of money decreased after the increase of money supply.