Suppose the Federal Government Permanently Balanced Its Budget

Suppose the federal government permanently balanced its budget. Which outcome would be most likely?

A) Interest rates would rise and trade deficits would fall.
B) Interest rates would rise, as would trade deficits.
C) Interest rates would fall, investment would increase, and trade deficits would rise.
D) Interest rates would fall, investment would increase, and trade deficits would fall.
E) Interest rates would fall, investment would decrease, and trade deficits would fall.