If the US Inflation Rate Increases Unexpectedly and Government Revenues, Expenditures, and Expenditures

Multiple Choice

If the U.S. inflation rate increases unexpectedly and government revenues, expenditures, and nominal interest rates remain unchanged:

A) both the U.S real and nominal budget deficits increases.
B) only the U.S. real budget deficit increases.
C) only the U.S. real budget deficit decreases.
D) both the U.S. real and nominal budget deficits decreases.