The conversation between human and AI assistant.
Why is lm curve upward sloping?
Can you explain the relationship between the money market and the loanable funds market?
The money market and loanable funds market are interconnected, as the demand for and supply of money in the money market affects the interest rate, which, in turn, affects the demand for and supply of loanable funds in the loanable funds market. Ultimately, the equilibrium interest rate is determined by the balancing of the money market and loanable funds market.