What would be the slope of the LM curve in the interest rate-income plane if the rate of interest is exogenously determined by the Central Bank?
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4 marks, −1MacroeconomicsIS-LM modelExtensions: expected inflation, endogenous money and rate targetingModerateabout 1 min
CUET-PG 2024 Question 36: IS-LM model
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IS-LM model has come up 137 times in 7 exams since 2004.
What this question tests
This question is on Extensions: expected inflation, endogenous money and rate targeting, part of IS-LM model in Macroeconomics.
Variations on the basic model: inflation expectations, money supply that responds, and central banks that target the rate.
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