Based on Our Understanding of the IS-LM Model That Takes

Multiple Choice

Based on our understanding of the IS-LM model that takes into account dynamics,we know that a reduction in government spending will cause

A) an immediate drop in Y and immediate increase in i.
B) an immediate reduction in i and no initial change in Y.
C) a gradual reduction in i and gradual reduction in Y.
D) a gradual reduction in i and an immediate reduction in Y.