If the Federal Government Lowers Government Expenditure

Multiple Choice

If the federal government lowers government expenditure:

A) aggregate expenditure will fall, leading to a decrease in equilibrium GDP.
B) aggregate expenditure will rise, leading to a rise in equilibrium GDP.
C) consumption and investment will decrease, leading to a fall in aggregate expenditure and a decrease in equilibrium GDP.
D) the government will experience a budget surplus, which will raise aggregate expenditure.