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A financial innovation, such as money market mutual funds, which increases the liquidity of alternatives to...

A financial innovation, such as money market mutual funds, which increases the liquidity of alternatives to money, would A) increase money demand, shifting the LM curve up. B) increase money demand, shifting the LM curve down. C) decrease money demand, shifting the LM curve up. D) decrease money demand, shifting the LM curve down

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Answer #1

c) decrease money demand shifting the LM curve up.

Increase in liquidity of alternatives to money would decrease money demand shifting the LM curve up.

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