When the money market is drawn with the value of money on the vertical axis,an increase in the money supply creates an excess
A)supply of money,causing people to spend more.
B)supply of money,causing people to spend less.
C)demand for money,causing people to spend more.
D)demand for money,causing people to spend less.

Question

Quizplus · Accepted Answer

An increase in the money supply would create an excess supply of money represented by a rightward shift in the money supply curve. This excess supply would cause a decrease in interest rates, increasing the demand for goods and services thus causing people to spend more.

When the Money Market Is Drawn with the Value of Money