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0Money demand at price level P2, MD2 Money demand atprice level P,
MD (a) (b) 3. . . . 2. . . . . . 0PriceLevelP2Y2YP4. . . . .1.
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19 - Copyright 2013 by Krume Nikoloski. All rights
reserved.MS2Moneysupply, MSAggregatedemand, ADYYPMoney demand at
price level PAD2Quantityof Money0InterestRaterr2(a) The Money
Market(b) The Aggregate-Demand CurveQuantityof Output0PriceLevel3.
. . . which increases the quantity of goods and services demanded
at a given price level.2. . . . theequilibriuminterest ratefalls .
. . 1. When the Fedincreases themoney supply . . . Copyright 2004
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