AP Macroeconomics part 3 video response

In this video we learned about the money market graphs. On the vertical axis there is the price of money or the interest rate. Then on the horizontal axis there is the quantity of money. The line for the demand of money is downward sloped, because as the price of money increases, then the quantity demanded decreases. Then when the price decreases the quantity demanded increases. The line for the supply of money is vertical at the point where the quantity is at equilibrium. When the demand increase the interest rate rises but the quantity stays the same, which begins to destabilize the economy. To stabilize the economy again the Fed can increase the money supply which will bring the interest rate back to equilibrium.