Figure 13-3
-In the figure above, suppose that the Fed maintains a fixed real money supply and that commodity demand is also fixed. The range of shifts in the LM curve, LM1 to LM2 can then only be explained by

Question

Figure 13-3 
-In the figure above, suppose that the Fed maintains a fixed real money supply and that commodity demand is also fixed. The range of shifts in the LM curve, LM1 to LM2 can then only be explained by

Quizplus · Accepted Answer

The LM curve shifts due to changes in the demand for money or changes in the velocity of money, as these affect the equilibrium in the money market while keeping the real money supply constant.

Figure 13-3 -In the Figure Above, Suppose That the Fed Maintains a Fed