Which of the Following Statements About the Liquidity and Money

question 26

Multiple Choice

Which of the following statements about the liquidity and money (LM) curve is NOT true?

• A) The LM curve will shift to the right if the monetary authorities increase the money supply, all other things being equal.
• B) The LM curve will shift to the left if the general level of prices in the economy rises, all other things being equal.
• C) The LM curve shows all combinations of interest rate and level of national income at which the money market is in equilibrium.
• D) The LM curve is unaffected by inflation.

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