What causes a shift in the LM curve?

A shift in the LM curve occurs when there is a change in the money supply or the aggregate demand for money, which in turn affects the equilibrium between the money market and the goods market in an economy. A shift to the right of the LM curve occurs when there is an increase in the money supply or a decrease in the demand for money. This can be caused by actions taken by the central bank, such as open market operations or changes in the reserve requirements. On the other hand, a shift to the left of the LM curve occurs when there is a decrease in the money supply or an increase in the demand for money. This can be caused by factors such as an increase in bank lending or an increase in precautionary saving by households. These shifts in the LM curve have important implications for interest rates and output levels in an economy.
This mind map was published on 18 September 2023 and has been viewed 98 times.

You May Also Like

What is the role of allies in LGBTQ+ advocacy?

What are the different tools and applications available in Kali Linux?

What are the major political issues facing my country?

Which simple recipes can be made on the stove?

What is the LM curve?

What are the factors affecting the ISLM curve?

How does the ISLM curve represent the relationship between interest rates and output?

What are the implications of shifts in the ISLM curve?

What are the factors that shift the IS curve?

What factors cause a shift in the IS curve?

What causes a shift in the IS curve?

How does AI impact human labor?