Question

Which of the following is incorrect regarding LM

Q: Answer-Which of the following is incorrect regarding LM curve?

The slope of LM curve also depends on the elasticity demand for money liquidity preference to the changes in rate of interest. The lower the elasticity the steeper the curve. Covered in videos and study notes snapshot from study notes of the ixamBee SEBI course

curve?

A Each point of LM curve shows an interest-income level at which demand for money is equal to supply for money

B The slope of the LM curve depends on responsiveness of demand for money to the changes in income

C The slope of LM curve depends on the elasticity demand for money to the changes in rate of interest. The higher the elasticity the steeper the curve.

D LM curve shifts to the right when the stocks of money supply increased

E LM curve shifts to the left if there is decrease in money demand function

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Which of the following is incorrect regarding LM

Solution