Below Is Some Data for a Hypothetical Economy

question 21

Multiple Choice

Below is some data for a hypothetical economy:

-Refer to the information above to answer this question.Suppose the economy is presently in equilibrium.If the government increases its spending by the amount of its current surplus/deficit,what will be the result?

• A)Increase equilibrium income by $40 and increase the surplus.
• B)Increase equilibrium income by $40 and reduce the surplus.
• C)Increase equilibrium income by $80 and increase the surplus.
• D)Increase equilibrium income by $80 and reduce the surplus.
• E)Increase equilibrium income by $40 and balance the budget.

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