The LM curve, in the usual case:
A) is vertical.
B) is horizontal.
C) slopes down to the right.
D) slopes up to the right.

Question

Quizplus · Accepted Answer

The LM curve, which represents the relationship between the liquidity preference and the money supply in an economy, typically slopes up to the right. This indicates that higher interest rates are associated with higher levels of income, as higher income levels lead to increased demand for money, which in turn leads to higher interest rates.

The LM Curve, in the Usual Case