When the money demand curve shifts right and the money supply is unchanged, the equilibrium price level decreases and the equilibrium value of money increases.

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The money supply in Grayfield is $8 billion. Nominal GDP is $32 billion and real GDP is $24 billion. The central bank of Grayfield has instituted a policy of zero inflation. Assuming that velocity is stable, if real GDP grows by 2.5 percent this year then the central bank of Grayfield will increase the money supply by 2.5 percent

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The Classical Dichotomy refers to the idea that money determines nominal variables such as nominal GDP and nominal wages, but not real variables such as real GDP and the real interest rate

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As the economy experiences inflation, people will want to hold more money as a medium of exchange because the value of money is lower.

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When the money demand curve shifts left and the money supply shifts right the equilibrium price level decreases and the equilibrium value of money increases.

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