The curve which relates the level of income with the rate of interest which is determined by money- market equilibrium corresponding to different levels of demand for money is known as
A)is curve
B)lm curve
C)income curve
D)none of the above.

Question

Quizplus · Accepted Answer

The LM curve represents the relationship between the liquidity preference (demand for money) and money supply, which is determined by the equilibrium in the money market at different levels of income. It shows the combinations of interest rates and levels of real income for which the money market is in equilibrium.

The Curve Which Relates the Level of Income with the Rate