Everything else held constant,if aggregate output is to the ________ of the LM curve,then there is an excess ________ of money which will cause the interest rate to rise.
A)right;supply
B)right;demand
C)left;supply
D)left;demand

Question

Quizplus · Accepted Answer

If aggregate output is to the right of the LM (Liquidity-Money) curve, it means that there is excess demand for money. As a result, the interest rate will increase to balance the supply and demand of money. Therefore, choice B (right; demand) is the correct answer.

Everything Else Held Constant,if Aggregate Output Is to the ________