Which of the following is true of the LM curve when the nominal interest rate (rather than the real interest rate)is on the vertical axis?
A)the LM curve becomes downward sloping.
B)a reduction in expected inflation will have no effect on the position of the LM curve.
C)a reduction in the expected inflation rate will make the LM curve shift up.
D)a reduction in the expected inflation rate will make the LM curve shift down.
E)none of the above

Question

Quizplus · Accepted Answer

The Answer of Which of the following is true of the LM curve when the nominal interest rate (rather than the real interest rate)is on the vertical axis?
A)the LM curve becomes downward sloping.
B)a reduction in expected inflation will have no effect on the position of the LM curve.
C)a reduction in the expected inflation rate will make the LM curve shift up.
D)a reduction in the expected inflation rate will make the LM curve shift down.
E)none of the above

Which of the Following Is True of the LM Curve