b The LM Curve .It can easily be detected that there is a i 7o positive relation between interest rate and sv income for a given my money supply. A curve that reflects such a relation is called LM (Standing for liquid and money) curve y (see the graph presented lin class). xThe LM Curve • It can easily be detected that there is a positive relation between interest rate and income for a given my money supply. A curve that reflects such a relation is called LM (standing for liquid and money) curve (see the graph presented in class)