When is the LM curve relatively steep?

1 answer

Answer

1218198

2026-08-02 08:40

+ Follow

If money demand has low sensitivity to change in interest rate,the interest rate would have to rise by a large amount to reduce the demand for real balance back to the fixed leveli.e the level at which demand for money is equal to supply of money.Accordingly,the LM curve would be quite steep

ReportLike(0ShareFavorite

Copyright © 2026 eLLeNow.com All Rights Reserved.