Monetarists argue that the demand for money is unresponsive to interest rates, i.e. depends on income only, produces a

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Monetarists believe that the demand for money is primarily determined by income, and that interest rates have little effect on this demand. Therefore, as income increases, the demand for money also increases, resulting in a vertical LM function. This is because the supply of money is fixed in the short run, and so any increase in demand for money will simply result in a higher interest rate.

Monetarists Argue That the Demand for Money Is Unresponsive to Interest