Question
Can you help me understand and explain the concept thoroughly? In the LM- Model, why does the Higher Interest rate increase with the outcome? Why
Can you help me understand and explain the concept thoroughly?
In the LM- Model, why does the Higher Interest rate increase with the outcome?
Why interest rate and income are positively related through LM curve but inversely related through IS curve?
If a high-interest rate leads to more savings, why do people hold less money according to the LM curve?
The LM curve is an upward-sloping curve. The reason for that is because when output increases, the money demand increases, which raises the real interest rate in the economy.
This does not help me understand the concept at all.
I thought that when Interest rate Increases, people are spending less and this affects outcome and income.
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