The quantity of money demanded increases with income. Thus if income increases, the opportunity cost of holding money must go up in order to reduce money demand and re-establish equilibrium in the money market. This relation is captured by:

(A) an upward sloping LM curve.
(B) a downward sloping L curve.
(C) a downward sloping IS curve.
(D) the circular flow of money in the economy.

»Important Links:

Latest Jobs in PakistanGovt Jobs in PakistanPrivate Jobs in Pakistan
NTS JobsPPSC JobsFPSC Jobs
Teaching JobsNADRA JobsBank Jobs
English McqsGeneral Knowledge McqsPak Studies Mcqs
Current Affairs McqsCurrent Affairs Mcqs PDFCurrent Affairs of Pakistan
Books PDFNotes PDFIslamic Studies Mcqs

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!