The curve that illustrates the positive relationship between the equilibrium values of aggregate output and the interest rate in the money market is the ?
Correct answer: B. LM curve
- A. money supply curve
- B. LM curve
- C. money demand curve
- D. IS curve
Explanation
The LM curve represents money-market equilibrium and normally slopes upward: higher output increases money demand, requiring a higher interest rate to maintain equilibrium with a fixed money supply.
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