Use the following to answer questions :
Exhibit: IS-LM Monetary Policy
-(Exhibit: IS-LM Monetary Policy) Based on the graph, starting from equilibrium at interest rate r₁ and income Y₁, a decrease in the money supply would generate the new equilibrium combination of interest rate and income:

Question

Use the following to answer questions :
Exhibit: IS-LM Monetary Policy

-(Exhibit: IS-LM Monetary Policy) Based on the graph, starting from equilibrium at interest rate r₁ and income Y₁, a decrease in the money supply would generate the new equilibrium combination of interest rate and income:

Quizplus · Accepted Answer

A decrease in the money supply shifts the LM curve to the left, resulting in a higher interest rate and lower income.

Use the Following to Answer Questions