You Would Expect the Increase in Economic Activity Caused by a $10

Multiple Choice

You would expect the increase in economic activity caused by a $10 billion increase in government purchases of goods and services to be:

A) completely offset by a $10 billion increase in transfer payments.
B) equal to the increase in economic activity caused by a $10 billion increase in transfer payments.
C) less than the increase in economic activity caused by a $10 billion increase in transfer payments.
D) greater than the increase in economic activity caused by a $10 billion increase in transfer payments.