LM curve

LM curve is the positive relationship between the interest rate and the level of income (while holding the price level fixed) that arises in the market for real money balances. (Cf. IS–LM model, IS curve.)

Definition

According to Macroeconomics by Mankiw (7th edition),

LM curve. The positive relationship between the interest rate and the level of income (while holding the price level fixed) that arises in the market for real money balances. (Cf. IS–LM model, IS curve.)