A decrease in the real money supply, other things being equal, will shift the LM curve:
A) downward and to the left.
B) upward and to the left.
C) downward and to the right.
D) upward and to the right.

Question

Quizplus · Accepted Answer

A decrease in the real money supply, other things being equal, will increase the interest rate, which will cause the LM curve to shift upward and to the left.

A Decrease in the Real Money Supply, Other Things Being