The probable effect of introducing automatic teller machines is to
A)increase money demand,shifting the LM curve up.
B)increase money demand,shifting the LM curve down.
C)decrease money demand,shifting the LM curve up.
D)decrease money demand,shifting the LM curve down.

Question

Quizplus · Accepted Answer

Introducing automatic teller machines would increase the efficiency of the banking system and reduce the need for individuals to hold cash, thereby decreasing the overall demand for money. This would lead to a downward shift in the LM curve, as the interest rate would need to decrease in order to maintain the same level of income and output in the economy.

The Probable Effect of Introducing Automatic Teller Machines Is to