I would say a just to make sure he is making a right chocie
Answer: c). a decrease in the government's budget surplus or an increase in its budget deficit.
Explanation: Budget surplus refers to the excess of government revenue from taxes and other sources over its expenditure. While, budget deficit refers to the excess of government expenditures over its revenue.
BS= T>G
BD= G>T
A decrease in the government's budget surplus or an increase in its budget deficit leads to an increase in the interest rate in the economy. Thus the correct option is c.
Ok let me state that if it is reduced by 25% is the same a multiplied by 0.75. Increased by 20% is the same as multiplied by 1.20. So what you need to do is multiply the two multipliers together to get the net effect. Now let me give you an example: <span>If I sell 100 things a day and sales go up 20% I sell 120 things a day. That is the same as multiplying sales by 1.20. So the formula you can use is
Gross Receipts = Sales Price * Number of units sold.
If I change Sales Price and Number of units sold each by simple multipliers, the effect on Gross Receipts will be the product of the multipliers. I hope this helps</span>
