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Overall impact of this resettling of the fiscal variables

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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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