A reasonable dynamic assumption for the IS-LM model is that

A) the economy is always on both the IS and LM curves.
B) the economy is always on the IS curve, but moves only slowly to the LM curve.
C) the economy is always on the LM curve, but moves only slowly to the IS curve.
D) the money market is quick to adjust, but the bond market adjusts more slowly.
E) adjustment to the new IS-LM equilibrium is instantaneous after an LM shift, but not after an IS shift.


C

Economics

You might also like to view...

Refer to Table 1-1. Using marginal analysis, how many hours should Eva extend her bakery's hours of operations?

A) 2 hours B) 3 hours C) 4 hours D) 5 hours E) 6 hours

Economics

What is the Alliance for a Green Revolution in Africa and who are its primary supporters?

What will be an ideal response?

Economics

The economist known for his early empirical work supporting the efficient markets hypothesis is

A) Milton Friedman. B) John Muth. C) Eugene Fama. D) Glenn Hubbard.

Economics

A business owned and managed by a single individual:

a. cooperative b. corporation c. trade association d. partnership d. sole proprietorship

Economics