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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