Starting from the equilibrium position illustrated, government spending on goods and services rises while the production costs of goods and services also rise at the same time. Which option most accurately describes the probable effect on the economy?
- Aequilibrium level of national income: falls; equilibrium level of prices: uncertain
- Bno change; no change
- Cequilibrium level of national income: rises; equilibrium level of prices: rises
- Dequilibrium level of national income: uncertain; equilibrium level of prices: rises