In the Keynesian model,short-run equilibrium occurs
A)where the IS and LM curves intersect.
B)where the IS curve, LM curve, and FE lines intersect.
C)where the IS curve intersects the FE line.
D)where the LM curve intersects the FE line.

Question

Quizplus · Accepted Answer

The IS (Investment-Savings) and LM (Liquidity preference-Money supply) curves intersection represents the short-run equilibrium in the Keynesian model, indicating the equilibrium levels of interest rates and output where the goods market and the money market are in balance.

In the Keynesian Model,short-Run Equilibrium Occurs