Economics · Macroeconomics
In the IS-LM model, what does the LM curve explicitly represent?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The equilibrium combinations of interest rate and income where investment equals savings
- 2The equilibrium combinations of interest rate and income where money supply equals money demand✓
- 3The point where consumption and investment curves intersect
- 4The point where fiscal and monetary policy curves intersect
Correct answer
The equilibrium combinations of interest rate and income where money supply equals money demand
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