Figure 17-2

Multiple Choice

Figure 17-2. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes.
-Refer to Figure 17-2. If the relevant money-demand curve is the one labeled MD₁, then the equilibrium value of money is

A) 0.5 and the equilibrium price level is 2.
B) 2 and the equilibrium price level is 0.5.
C) 0.5 and the equilibrium price level cannot be determined from the graph.
D) 2 and the equilibrium price level cannot be determined from the graph.