What Is the Result of Using Balanced-Budget Fiscal Policy When

Multiple Choice

What is the result of using balanced-budget fiscal policy when both a recessionary gap and a budget deficit exist?

A) The recessionary gap would be reduced and the budget deficit would fall.
B) The recessionary gap would increase and the budget deficit would fall.
C) The recessionary gap would be reduced and the budget deficit would rise.
D) The recessionary gap would increase and the budget deficit would rise.