(Answered) destion 70 of 90A decrease in real GDP canshift money demand to the right and increase the interest…

➤ How does a decrease in money demand influence the LM curve and equilibrium interest rate?
In the IS-LM framework, lower money demand acts like an increase in real money supply. The LM curve shifts down or right, which lowers the equilibrium interest rate for any given income. Markets reprice bonds and borrowing costs fall until a new money-market equilibrium is reached.