An Explanation for the Slope of the LM Curve Is

question 58

Multiple Choice

An explanation for the slope of the LM curve is that as:

• A) the interest rate increases, income becomes higher.
• B) the interest rate increases, income becomes lower.
• C) income rises, money demand rises, and a higher interest rate is required.
• D) income rises, money demand rises, and a lower interest rate is required.

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Definitions:

Parallel Circuit

An electrical circuit where components are connected across common points or junctions, providing multiple paths for current.

Inductive Reactance

The resistance to the change in current flow by an inductor in an AC circuit, measured in ohms and dependent on frequency.

Inductive Reactance

Inductive reactance is the opposition to the change in current flow by an inductor, and it increases with an increase in the frequency of the applied electric signal.

Parallel Circuit

An electrical circuit configuration where multiple paths are available for current flow, resulting in each component having the same voltage applied.