Each point on the LM curve represents the equilibrium point in the ?
Correct answer: B. money market for different combinations of interest rates and output
- A. money market for the given level of the money supply
- B. money market for different combinations of interest rates and output
- C. goods market for the given level of government spending
- D. goods market for the given interest rate
Explanation
Every point on the LM curve shows money-market equilibrium for a particular combination of income or output and the interest rate, given the money supply. The IS curve instead represents goods-market equilibrium.
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