How is the liquidity-money (LM) curve derived? What impacts it and how does it impact the global economy? Use examples and support your claims.© BrainMass Inc. brainmass.com March 21, 2019, 10:26 pm ad1c9bdddf
The LM curve stands for "Liquidity preference and Money supply equilibrium". It shows the set of equilibrium points between the Demand for Money (liquidity preference) and the Supply of Money in an economy. The LM curve is affected by factors that shift the Money Demand and Money Supply curves, such as:
1. Transactions demand for money. As GDP ...
How the Liquidity-Money (LM) curve is derived and examples of how changes in the IS-LM equilibrium impact the economy are provided.