At any point along the LM curve,
A)the quantity of money demanded equals the quantity of money supplied.
B)the economy must be in general equilibrium.
C)the nominal interest rate must equal the real interest rate.
D)saving must equal investment.

Question

Quizplus · Accepted Answer

The LM curve represents a combination of interest rates and levels of income at which the demand for money (liquidity preference) equals the supply of money, thus ensuring equilibrium in the money market.

At Any Point Along the LM Curve