In a Closed Economy, an Increase in the Demand for Money

question 6

Multiple Choice

In a closed economy, an increase in the demand for money shifts the LM curve to the __________; other things equal, this will lead to __________ in national income.

• A) right; an increase
• B) right; a decrease
• C) left; an increase
• D) left; a decrease

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Definitions:

United States

A country located in North America, comprising 50 states and known for its significant influence in global economics, politics, and culture.

Stack

A collection or pile of objects arranged one atop another.

Blocks

Solid pieces of hard material with flat surfaces used for construction or as toys.

Infants

Young babies, typically under one year of age.