If the money demand decreases, everything else held constant, the ________ curve shifts to the ________.
A)IS; right
B)IS; left
C)LM; left
D)LM; right

Question

Quizplus · Accepted Answer

A decrease in money demand, with everything else constant, shifts the LM curve to the left because it implies that at each level of income, a lower interest rate is needed to equate money supply with money demand.

If the Money Demand Decreases, Everything Else Held Constant, the ________