In the LM curve, the __________ the interest-sensitivity of liquidity preference, the __________ the necessary increase in the rate of interest to restore equilibrium.
A) greater; smaller
B) greater; greater
C) smaller; smaller
D) None of the above.
Correct Answer:
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Q4: At _ income levels on the LM
Q5: The LM curve shows points of equilibrium
Q6: Liquidity preference theory indicates that at lower
Q7: For an individual LM curve, the money
Q8: Assume that the Cambridge k = .20.
Q10: Along an LM curve at higher income
Q11: A weakness of the simple Keynesian model
Q12: The LM curve represents combinations of income
Q13: Assume that the Cambridge k = 0.2.
Q14: The slope of the LM curve will
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