Overall impact of this resettling of the fiscal variables

Reference no: EM13692336

Suppose we have an economy in which G = 100, t = 0.26, Y = 3800, and YN = 4000. Then t rises to 0.28 as the same time as G rises to 1150. The overall impact of this resettling of the fiscal variables is ________ because ________.

A) expansionary, the natural employment deficit falls

B) expansionary, the actual deficit rises

C) contractionary, the natural employment deficit falls

D) contractionary, the natural employment deficit rises

E) contractionary, the actual deficit rises

Reference no: EM13692336

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