Suppose government spending is reduced by $100 billion. Explain what effect this reduction in government spending will have on the size of a budget deficit. Specifically, does the deficit increase or decrease? And, is any change in the deficit equal to, larger than, or smaller than $100 billion?

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The Answer of Suppose government spending is reduced by $100 billion. Explain what effect this reduction in government spending will have on the size of a budget deficit. Specifically, does the deficit increase or decrease? And, is any change in the deficit equal to, larger than, or smaller than $100 billion?

Suppose Government Spending Is Reduced by $100 Billion