Question

D. decreases; demand for money E None of the above 3. Suppose the money supply remains constant and the money demand curve shifts left. This is illustrated on a graph of the money market as in the demand for money and that creates A an increase: an excess demand for money that is eliminated by rising prices B an increase: an excess demand for money that is eliminated by falling prices C a decrease: an excess demand for money that is eliminated by rising prices. D a decrease, an excess supply of money that is eliminated by falling prices E a decrease: an excess supply of money that is eliminated by rising prices. When the money demand curve shifts right, (x) the equilibrium value of money will decrease if the Fed does not increase the money supply (y) the Fed should increase the money supply if it wants to keep the price level stable. (z the Fed should increase the money supply if it wants to keep the value of money stable, A (X). (y) and (2) B x ) and (y) only C. (x) and (2) only D. (y) and (2) only E y ) only 5. When the money demand curve shifts right and the money supply shifts left *) the equilibrium price level decreases y) the equilibrium value of money increases (z) the equilibrium value of money decreases A xendy only B ) and only cx only Dy) only Z only

Answer 1

Due to presence of Chegg policy, I am answering first question.

3.

Ans: E.

Explanation:

Decrease in money demand causes excess supply of money in market which leads to inflationary pressures and rise in price level of average. This process of rising prices eliminates excess money supply in the economy.

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