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Illustrate the graphical derivation of the LM Curve.

Answers

NB: Money supply is fixed, and income Y1 < Y2 < Y3 < Y4.

The positive slope of LM curve shows that with fixed money supply and rising levels of income, equilibrium in the money market is only attainable through increase in the rate of interest.

Kavungya answered the question on August 10, 2021 at 08:58

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