Macro Aplia
2. Money supply, money demand, and adjustment to monetary equilibrium The following table shows a money demand schedule, which is the quantity of money demanded at various price levels (P). Fill in the Value of Money column in the following table. Price Level (P) Value of Money (1/P) Quantity of Money Demanded (Billions of dollars) 1.00 1.00 2.0 1.33 0.75 2.5 2.00 0.50 4.0 4.00 0.25 8.0 Points: 1 / 1 Now consider the relationship between the price level and the quantity of money that people demand. The lower the price level, the less money the typical transaction requires, and the less money people will wish to hold in the form of currency or demand deposits. Points: 1 / 1 Close Explanation Explanation: The price level (P) is a measure of the average level of prices in the...