Looking only at the asset market,an increase in output would cause
A)the LM curve to shift down and to the right.
B)the LM curve to shift up and to the left.
C)an increase in the real interest rate along the LM curve.
D)a decrease in the real interest rate along the LM curve.

Question

Quizplus · Accepted Answer

An increase in output increases the demand for money, which, holding the money supply constant, increases the real interest rate to balance money supply and demand along the LM curve.

Looking Only at the Asset Market,an Increase in Output Would