If the Government Started with a Budget Deficit and Moved

question 79

Multiple Choice

If the government started with a budget deficit and moved to a surplus, which statement would best describe the effects of these changes?

• A) Domestic investment would rise, and the trade balance would move towards surplus.
• B) Domestic investment would rise, and the trade balance would move towards deficit.
• C) Domestic investment would fall, and the trade balance would move towards surplus.
• D) Domestic investment would fall, and the trade balance would move towards deficit.