💼 Pre-MBA Exam Prep

The IS-LM model shows equilibrium between:

A Imports and exports
B The goods market (IS) and money market (LM) simultaneously determining interest rates and output
C Supply and demand only
D Savings and debt

✓ Correct Answer: Option B

IS curve: combinations of r and Y where goods market clears (I=S). LM curve: r and Y where money market clears (Md=Ms). Intersection = simultaneous equilibrium. Key macro framework.

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