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Macroeconomics

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Moderate

Negative Money Demand Shift

MACRO-NPDYLP

New technology makes it easier to access your money if needed, so agents in the economy demand less money in hand to complete their monthly transactions.

According to the IS/LM analysis what will happen to interest rates and output?

A

Interest rates rise and output falls.

B

Interest rates rise and output rises.

C

Interest rates fall and output falls.

D

Interest rates fall and output rises.

E

There is no change to interest rates and output.