real money terms - as opposed to nominal money, which doesn't account for inflation  

• M/P = real money supply
  • M/P = Y L(i)
  • increases as interest decreases
• increase income (Y) >> increase real money demand
  • if supply stays constant, interest must increase to lower real money demand if income (Y) increases
• slopes upward
• difference curves for each M/P level
  • M/P increases >> need lower interest rate to make demand match >> shifts down
  • M/P decreases >> need higher interest rate >> shifts up

• money market curves shift w/ different output
• plots the equilibria points of money market by output Y instead of real money M/P
• w/ substitution, changes in M/P causes shifts in LM curve
  • monetary policy >> changes money supply >> can shift LM curve