The LM curve is really an algebraic or graphic representation of all the combinations of interest rates and GDP that support
A) equality between investment and the sum of private and public saving.
B) equality between supply and demand in the markets for goods and services across the economy.
C) equality between supply and demand in the money market.
D) the expectations of both the Federal Reserve System Board of Governors and the President's Council of Economic Advisers.
E) all of the above.

Question

Quizplus · Accepted Answer

The LM curve represents all combinations of interest rates and levels of real GDP at which the money market is in equilibrium, meaning where the supply and demand for money are equal.

The LM Curve Is Really an Algebraic or Graphic Representation