Question:medium

Consider the following statements: A. IS curve shifts to right when government's expenditure rises, B. LM Curve shifts to left when money supply falls, C. Interactions of IS-LM curve determines equilibrium of interest rate and income, D. A rise in price level shift LM curve to left, E. Liquidity trap makes LM curve vertical.

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Liquidity trap makes the LM curve horizontal because interest rate is very low and people prefer holding money.

Updated On: May 22, 2026

A, B, C, D Only
A, B, D, E Only
A, B, C, E Only
B, C, D, E Only

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The Correct Option is A

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