If the interest rate is exogenously determined by the Central Bank of some country and the money supply is endogenously determined, the slope of the LM-curve in the interest rate-income plane would be:
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UGC-NET 2023 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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