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

Question

Quizplus · Accepted Answer

A decrease in the nominal money supply, other things being equal, will lead to a higher interest rate for any given level of income, which is represented by a shift of the LM curve upward and to the left in the interest rate-income (or output) space.

A Decrease in the Nominal Money Supply, Other Things Being