According to the IS-LM model, if the central bank increases money supply, then the rate of interest will ________ and the income will ________.
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2 marks, −0.667MacroeconomicsIS-LM modelMonetary policy and the liquidity trap in IS-LMModerateabout 2 min
IIT JAM 2025 Question 18: 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 Monetary policy and the liquidity trap in IS-LM, part of IS-LM model in Macroeconomics.
How money supply changes work, and the classical and liquidity-trap extremes.
TestStop has 18 past-paper questions on this subtopic.
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