Refer to Figure 30-2. If the relevant money-demand curve is the one labeled MD₂, then the equilibrium value of money is

A) 0.525 and the equilibrium price level is 1.9.
B) 1.9 and the equilibrium price level is 0.525.
C) 0.525 and the equilibrium price level cannot be determined from the graph.
D) 1.9 and the equilibrium price level cannot be determined from the graph.

Equilibrium Value

The point where supply equals demand in a market, resulting in a stable price and quantity for goods and services.

Price Level

The current pricing average for every produced good and service within the economy.

Money Demand Curve

A graph showing the relationship between the interest rate and the total amount of money that consumers and businesses wish to hold at any given time.