Episodio 1x13. THE MONEY MARKET: THE LM CURVE. 6p2k3z

Equilibrium in the money market occurs when the demand for money is equal to the amount of money in that economy, that is, when L=M/P. Monetary equilibrium occurs where the money supply and money demand curves intersect. It shows this equilibrium. The intersect between the supply and demand for money determines the equilibrium interest rate. If the money supply increases, the interest rate decreases, while if the money demand decreases, the interest rate will increase. 112i4v