If the demand for money decreases, ceteris paribus, the LM curve would:
A) shift right.
B) shift left.
C) remain constant.
D) slope more steeply.

Question

Quizplus · Accepted Answer

A decrease in demand for money means that people want to hold less money for transactions, implying a greater willingness to lend or invest. This leads to a decrease in the interest rate at every level of income, causing the LM curve to shift leftward.

If the Demand for Money Decreases, Ceteris Paribus, the LM