Suppose That in China, Investment Is $400 Billion, Saving Is

question 57

Multiple Choice

Suppose that in China, investment is $400 billion, saving is $400 billion, tax revenues are $500 billion, exports are $300 billion, and imports are $200 billion. The government budget ________ the supply of loanable funds, which ________ the real interest rate and ________ investment.

• A)surplus increases; lowers; decreases
• B)surplus decreases; raises; increases
• C)surplus increases; lowers; increases
• D)deficit decreases; raises; decreases
• E)surplus increases; raises; decreases