7. According the equation of exchange, it is absolutely certain that a change in the money supply will lead to a proportional change in prices. 8. Keynes identified the demand for money as coming from the demand for transactions purposes, precautionary purposes and speculative purposes. 9. The aggregate supply (AS) - aggregate demand (AD) model can be used to analyze short run economic events, but not long run changes. 10. The aggregate demand slopes down to the right due to factors such as that a lower price level will also lower real money balances