False. An increase in money demand would not create a surplus of money at the original value of money.
The demand for money is growing, as evidenced by a rise in demand. A greater real GDP, a greater price level, a shift in expectations, a rise in transfer costs, or a shift in preferences could all contribute to such an increase.
The equilibrium interest rate will alter if there is a change in the demand or supply of money. The demand curve of money swings to the right as money demand rises, which raises the nominal interest rate. On the other side, as money demand declines, the demand curve of money shifts towards the left, which results in a reduced interest rate.
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