When western macroeconomics textbooks at home and abroad introduce ISLM model, only the effect of real money supply change on LM curve is considered instead of the influence of the changes of money demand on the shift of LM curve.〖BP)〗Geometric and algebraic methods are used to analyze how to better normatively express LM curve shift and to analyze the impact of the change of money demand factors on monetary policy efficiency based on China’s reality and based on the factors and influential process affecting the shift of LM curve from demand side. Analysis results show that the factors affecting LM curve shift include money transaction demand, money speculation demand and the change of real money supply quantity, that both money transaction demand function and money speculation demand function have constant term, that when LM curve shifts, LM curve being described as upward or downward shift is more standard, that both money transaction demand and money speculation demand can cause LM curve to upward shift, and that in the future, China’s money transaction demand will decrease but money speculation demand will increase, which further give rise to the reducing of monetary policy effect.