A Reasonable Dynamic Assumption for the IS- LM Model Is

Multiple Choice

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

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