Economics · Macroeconomics
In the IS-LM model, when money demand is highly responsive to interest rate changes, it results in a flatter LM curve. This condition is characterized as money demand being:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Interest-inelastic
- 2Interest-elastic✓
- 3Perfectly inelastic
- 4Perfectly vertical
Correct answer
Interest-elastic
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