6. Under the simplifying assumption that assets can be grouped into two categories-money and nonmonetary assets-the asset market is in equilibrium if the quantity of money supplied equals the quantity of money demanded. When all markets are in equilibrium (the economy is at full employment), the level of output is deter- mined by equilibrium in the labour market, the real interest rate is determined by equilibrium in the goods market, and the price level is deter- mined by equilibrium in the asset market. The equilibrium price level is proportional to the nominal money supply.