An increase in the real money stock shifts the LM curve to the right.

Here's why:

1. The LM curve represents the relationship between interest rates and the level of income that equates the demand for money with the supply of money.

2. When the real money stock increases, it means there is more money available in the economy.

3. This increase in money supply reduces the interest rate for a given level of income, as there is more money chasing the same amount of goods and services.

4. As a result, for each level of income, the interest rate that equates the demand for money with the new, higher supply of money is lower.

5. This shift in the equilibrium interest rate at each level of income shifts the LM curve to the right.

Question

An increase in the real money stock shifts the LM curve to the right.

Here's why:

1. The LM curve represents the relationship between interest rates and the level of income that equates the demand for money with the supply of money.

2. When the real money stock increases, it means there is more money available in the economy.

3. This increase in money supply reduces the interest rate for a given level of income, as there is more money chasing the same amount of goods and services.

4. As a result, for each level of income, the interest rate that equates the demand for money with the new, higher supply of money is lower.

5. This shift in the equilibrium interest rate at each level of income shifts the LM curve to the right.

Knowee AI · Accepted Answer

An increase in the real money stock shifts the LM curve to the right.

Here's why:

1. The LM curve represents the relationship between interest rates and the level of income that equates the demand for money with the supply of money.

2. When the real money stock increases, it means there is more money available in the economy.

3. This increase in money supply reduces the interest rate for a given level of income, as there is more money chasing the same amount of goods and services.

4. As a result, for each level of income, the interest rate that equates the demand for money with the new, higher supply of money is lower.

5. This shift in the equilibrium interest rate at each level of income shifts the LM curve to the right.

An increase in the real money stock shifts theGroup of answer choicesIS curve to the rightIS curve to the leftLM curve to the rightLM curve to the left

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An increase in the real money stock shifts the

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