In the IS-LM diagram,we are in "general equilibrium"
A)at all points.
B)at all points on the LM curve.
C)at all points on the IS curve.
D)only at the intersection of the IS and LM curves.

Question

Quizplus · Accepted Answer

General equilibrium occurs when both the goods market (represented by the IS curve) and the money market (represented by the LM curve) are in balance. Therefore, general equilibrium can only occur at the intersection of the IS and LM curves.

In the IS-LM Diagram,we Are in "General Equilibrium