Which of the following would shift the LM curve?
A)an increase in the tax rate
B)an increase in the real money supply
C)a reduction in business confidence
D)All of these.

Question

Quizplus · Accepted Answer

An increase in the real money supply would shift the LM curve to the right, as it would lower interest rates at any given level of income. A decrease in business confidence would shift the IS curve to the left, while an increase in the tax rate would reduce disposable income and shift the IS curve to the left, both of which would lead to a decrease in income and a leftward shift in the LM curve. Therefore, choices A and C would not shift the LM curve, and choice D is incorrect.

Which of the Following Would Shift the LM Curve