With the value of money on the vertical axis,the money supply curve is
A)upward sloping because people supply a larger quantity of money when the value of money increases.
B)downward sloping because people supply a larger quantity of money when the value of money decreases.
C)horizontal because we assume the central bank controls the money supply
D)vertical because we assume the central bank controls the money supply.

Question

Quizplus · Accepted Answer

The money supply curve is typically assumed to be vertical because it represents the amount of money that the central bank has decided to supply, which is independent of the value of money. As such, the money supply curve is not affected by changes in the value of money and remains fixed at the level determined by the central bank.

With the Value of Money on the Vertical Axis,the Money