The LMcurve in the ASAD model
The LMcurve will shift upwards (downward) when P is increases (decreases)
in the ASAD model is moved

LMcurve in the ASAD model is slightly more complicated as P will affect the demand for money. In ISLM model, LMcurve is defined as all combination of R and Y where money market is in equilibrium, that is, where demand for money is equal to supply of money, M_{D}(Y, R) = M_{S}.
In ASAD model, LMcurve demonstrates all combinations of R and Y, where money market is in equilibrium for a given P. For a given P, we may still draw LM curve in the ASAD model just as we did in ISLM model. For a given P, there are numerous combinations of R and Y where money market is in equilibrium. Besides for another given P, another set of combinations of R and Y would be associated with equilibrium in the money market. It means that LMcurve will shift when P changes.
Figure: Money market diagram with different prices
1. First consider top left figure. Demand curve for money, MD1 is drawn for Y = 100 and P = 10. Equilibrium interest rate is R = 5%.
2. Y = 100 and R = 5% will provide us with a point on the LM1 curve to the right.
3. Now assume that P increases to 20. We know that demand for money will increase and curve will shift to the right (to MD2).
4. We see that R = 5% and Y = 100 is no longer an equilibrium in money market.
5. To the left you see that R = 7% would be an equilibrium when Y = 100 for P = 20.
6. R = 7% and Y = 100 should be on a new LM curve (LM2) associated with higher price P = 20.
There is an LM curve for P = 10 (LM_{1}) and an LM curve for P = 20 (LM_{2}). The significant thing to remember is that in ASAD model, there is one LMcurve for each value of P. When P increases, LM curve will shift to a new curve that will be above the old one. Reason, again, is that R should increase when P increases to keep the money market in equilibrium.