An increase in the money supply will shift the LM curve to the _______ and the ________

Question

Quizplus · Accepted Answer

An increase in the money supply shifts the LM curve to the right because more money in the economy lowers interest rates, stimulating investment and increasing income at any given price level. This also shifts the Aggregate Demand (AD) curve to the right as the increase in income leads to higher demand for goods and services.

An Increase in the Money Supply Will Shift the LM