An increase in the nominal return on money
A)shifts the LM curve up and to the left.
B)shifts the LM curve down and to the right.
C)will increase the real interest rate on nonmoney assets.
D)shift the IS curve down and to the right.

Question

Quizplus · Accepted Answer

An increase in the nominal return on money makes holding money more attractive, reducing the demand for non-money assets, which shifts the LM curve up and to the left as the equilibrium interest rate rises.

An Increase in the Nominal Return on Money