An autonomous increase in money demand,other things equal,shifts the ________ curve to the ________.
A)IS;right
B)IS;left
C)LM;left
D)LM;right

Question

Quizplus · Accepted Answer

An autonomous increase in money demand, with other factors held constant, shifts the LM curve to the left. This is because the LM curve represents the relationship between the interest rate and the level of income that equates the demand for and supply of money. An increase in money demand at any given interest rate means that a higher interest rate is now required to equate money demand with the fixed money supply, thus shifting the LM curve leftward.

An Autonomous Increase in Money Demand,other Things Equal,shifts the ________