The Diagram Below Shows Two Budget Deficit Functions for a Hypothetical

Multiple Choice

The diagram below shows two budget deficit functions for a hypothetical economy. FIGURE 31-2 Refer to Figure 31-2.Initially,suppose real GDP is $100 million and the budget deficit is $14 million,as shown by point A.Which of the following events could result in a move from point A to point C?

A) a fiscal expansion and an increase in GDP
B) a fiscal contraction and an increase in GDP
C) a fiscal expansion and a decrease in GDP
D) a fiscal contraction and a decrease in GDP
E) an increase in GDP with no change in fiscal policy