DSE-2011#17 and DSE-2009#17,same question repeat

[sonudelhi]

hey have alook,in both que, he is asking the effect of increase of expected rate of inflation,in 2009 it shifts LM curve and in 2011 it leaves LM unchanged ,i think i depends upon how we plot IS-LM.....i or r on y-axis


plz verify my reasoning

[Amit Goyal]

In 2009, its not asked whether a change in expected inflation will shift the LM curve. The question in 2009 is: what will happen to the equilibrium income and the real interest rate. And the answer to that is same in both years.

[sonudelhi]

thanks sir,..i think An increase in expected rate of inflation will increase i and decrease r.....Is IS curve shifts up?????