A. when the demand and supply of money are equal
B. when demand is greater than supply of money
C. when demand is less than supply of money
D. when supply is greater than demand for money
Correct Answer: Option A
A. when the demand and supply of money are equal
Explanation
The money market is in equilibrium when the demand & supply of money are equal i.e L = μ
where L = money demand, μ = money supply
Thus μ = LT(γ) + Ls(r)
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