Which of the Following Is True of the LM Curve

question 56

Multiple Choice

Which of the following is true of the LM curve when the nominal interest rate is on the vertical axis?

• A) The LM curve becomes downward sloping.
• B) The LM curve becomes steeper.
• C) A change in expected inflation will have no effect on the position of the LM curve.
• D) A decrease in the expected inflation rate will make the LM curve shift down.
• E) A decrease in the expected inflation rate will make the LM curve shift up.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising and, subsequently, purchasing power is falling.

Medical Technology

The application of scientific and technological advances to the development of solutions and equipment that improve health conditions, diagnosis, and treatment of diseases.

Escalating Costs

Refers to the phenomenon where the prices of goods, services, or requirements for running a business or project continuously rise over time.

Surgical Procedures

Medical operations performed to diagnose, treat, or prevent disease, involving the manipulation of tissues and organs.