What is the difference between a Classical LM curve and a Keynesian LM curve?
The LM curve shows the different combination of interest rate and income when the money market is in equilibrium. A normal LM curve is an upward sloping curve which states the direct relationship between interest rate and income.
Answer and Explanation:
The Classical LM curve is a vertical LM curve, as classical theory argues that there is an upper-level interest rate where all the surplus income is...
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from Economics 102: MacroeconomicsChapter 11 / Lesson 10