One policy response to the economic slowdown in Canada in 2008-2009 was to increase money growth. This policy response can be represented in the IS-LM model by shifting the _____ curve to the _____.
A)LM; right
B)LM; left
C)IS; right
D)IS; left

Question

Quizplus · Accepted Answer

Increasing money growth typically shifts the LM curve to the right in the IS-LM model, indicating an increase in the money supply which lowers interest rates and stimulates investment and output.

One Policy Response to the Economic Slowdown in Canada in 2008-2009