The LM Curve Shows That, with a Fixed Supply of Money

question 124

Multiple Choice

The LM curve shows that, with a fixed supply of money, as GDP rises, the demand for money will ____ and the rate of interest will ____.

• A) rise; rise
• B) fall; fall
• C) rise; fall
• D) fall; rise

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Definitions:

Weak Economy

A state of an economy where there is slow economic growth, high unemployment rates, and generally poor economic performance.

Product Development

The creation and design of new products or improvements to existing products, from idea conceptualization to market launch.

Market Penetration

An indicator of how much a product or service has been sold or used, in relation to the overall potential market for it.

Positioning

The process of establishing a brand or product in the mind of consumers by differentiating it from competitors through marketing strategies.