According to the Classical Model,if the Government Lowers Its Budget

Multiple Choice

According to the classical model,if the government lowers its budget deficit,which of the following will occur?

A) The interest rate will rise,and consumption,investment and output will all decrease.
B) The interest rate will fall,consumption and investment will increase,but output will not change.
C) The interest rate will rise,and consumption,investment and output will all increase.
D) The interest rate will fall,and consumption,investment and output will all increase.
E) The interest rate will fall,consumption will not change,but investment and output will both increase.