-Refer to the Figure Above to Answer This Question

Multiple Choice

-Refer to the figure above to answer this question.If government spending is G₁ and GDP is Y₁,why won't a reduction in government spending by the size of the budget deficit eliminate the deficit?

A) Because GDP and NTR will decrease as a result of the decrease in government spending.
B) Because government spending is a function of income.
C) Because GDP will rise as a result of the decrease in government spending.
D) Because NTR will rise as a result of the decrease in government spending.