Economics (AS & A Level) · May / June 2021 · Paper 32 · Question 26

In a country the initial money supply curve is given by MS0, the initial liquidity preference curve by LP0 and the initial rate of interest by R0. If there is an increase in the precautionary motive for holding money, which diagram shows the changes that will occur?

1. ADiagram A
2. BDiagram B
3. CDiagram C
4. DDiagram D

As printed in the paper