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Why is the LM curve positively sloped?
  • a)
    An increase in interest rates increases money demand.
  • b)
    A decrease in interest rates increases money demand.
  • c)
    A higher interest rate reduces money demand.
  • d)
    A lower interest rate reduces money demand.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Why is the LM curve positively sloped?a)An increase in interest rates ...
The LM curve is positively sloped because an increase in interest rates increases money demand due to higher opportunity costs of holding non-interest-bearing money.
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Why is the LM curve positively sloped?a)An increase in interest rates increases money demand.b)A decrease in interest rates increases money demand.c)A higher interest rate reduces money demand.d)A lower interest rate reduces money demand.Correct answer is option 'B'. Can you explain this answer?
Question Description
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