Assume that the multiplier in the Chinese economy is 3 and autonomous investment expenditures increase by $100. The Chinese government has a budget deficit of $100 and the income tax rate is 30 percent. The increase in autonomous investment expenditures will: A. increase equilibrium income by $300 and cause the budget deficit to decrease by $90.
B. increase equilibrium income by $300 and cause the budget deficit to decrease by $100.
C. increase equilibrium income by $300 and cause the budget deficit to increase by $100.
D. increase equilibrium income by $300 and cause the budget deficit to increase by $90.