Assume That the Government Is Currently Balancing the National Budget

Multiple Choice

Assume that the government is currently balancing the national budget so that outlays equal tax revenue.Then the economy slips into recession,and the government decides to increase government spending by $50 billion.The government must pay for this by borrowing; it must sell $50 billion worth of Treasury bonds.As a result,the federal budget will

A) be in deficit by less than $50 billion.
B) be in surplus by at least $50 billion.
C) remain balanced.
D) be in surplus by $50 billion.
E) be in deficit by at least $50 billion.