Given a monetary policy that targets the monetary base, the appropriate LM representation shows
A) a stationary LM curve with the real interest rate climbing with GDP to keep the demand for money in line with the supply.
B) a horizontal line at the equilibrium rate of interest, indicating little or no sensitivity of the real rate to changes in GDP.
C) the real interest rate falling, as GDP climbs, to keep the demand for money in line with the supply.
D) a nearly vertical line above the level of GDP associated directly with the target base and invariant to changes in the interest rate.
E) none of the above.

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The Answer of Given a monetary policy that targets the monetary base, the appropriate LM representation shows
A) a stationary LM curve with the real interest rate climbing with GDP to keep the demand for money in line with the supply.
B) a horizontal line at the equilibrium rate of interest, indicating little or no sensitivity of the real rate to changes in GDP.
C) the real interest rate falling, as GDP climbs, to keep the demand for money in line with the supply.
D) a nearly vertical line above the level of GDP associated directly with the target base and invariant to changes in the interest rate.
E) none of the above.

Given a Monetary Policy That Targets the Monetary Base, the Appropriate