The Economy Is in Equilibrium,TP = TE,and Real GDP Is

Multiple Choice

The economy is in equilibrium,TP = TE,and Real GDP is $4,000 billion.The MPC is 0.70,the multiplier is operative,and idle resources exist at each expenditure round.Government purchases fall by $17 billion.As a result,the TE curve shifts __________,inventory levels unexpectedly __________,business firms __________ the quantity of goods and services they produce,and Real GDP __________ by __________.

A) downward; rise; decrease; falls; approximately $56.7 billion
B) downward; fall; increase; falls; approximately $56.7 billion
C) upward; rise; decrease; falls; $17 billion
D) upward; fall; decrease; rises; $17 billion
E) downward; rise; decrease; falls; approximately $11.9 billion