Question

Effect on money market equilibrium when money supply rises

Answer 1

Equilibrium in the money market takes place when the quantity of money demanded is equal to the quantity supplied. Here's what this equilibrium looks like.

Now that we have a model to work with, we can begin to visualize what happens when money demand increases or decreases, or when the money supply is increased or decreased by the Federal Reserve. Let's look first at an example of money demand changing and then see what happens when the supply of money changes instead.

Answer 2

people not by people will not buy goods and service so