nsTeam1RO, nsTeam1RW, nsTeam1_talkRO, nsTeam1_talkRW
11,789
edits
Changes
Jump to navigation
Jump to search
mLine 1:
Line 1: − +
undeadend + bold title
The LM curve identifies combinations of income and the interest rate for which the demand for money equals the money supply. As income, y, rises, the interest rate, i, must also rise in order to maintain equilibrium. The initials LM stand for "Liquidity preference/Money supply equilibrium".
The '''LM curve''' identifies combinations of income and the interest rate for which the demand for money equals the money supply. As income, y, rises, the interest rate, i, must also rise in order to maintain [[equilibrium]]. The initials LM stand for "Liquidity preference/Money supply equilibrium".
It is generally used in conjunction with the IS Curve. The government can shift the LM Curve through monetary policy (increasing or decreasing the money supply), and the IS curve through fiscal policy (taxes and spending)
It is generally used in conjunction with the IS Curve. The government can shift the LM Curve through monetary policy (increasing or decreasing the money supply), and the IS curve through fiscal policy (taxes and spending)
[[Category:Economics]]
[[Category:Economics]]