# Doubt on the meaning of real money balances

Mankiw defines real money balances, $\frac{M}{P}$, to be the quantity of goods and services a given amount of money can buy. On page 88 of Macroeconomics 7th edition, he illustrates the concept with the following example:

Real money balances measure the purchasing power of the stock of money. For example, consider an economy that produces only bread. If the quantity of money is $\$10$, and the price of a loaf is$\$0.50$, then real money balances are $20$ loaves of bread. That is, at current prices, the stock of money in the economy is able to buy $20$ loaves.