The ultimate effect of the decrease in government spending $G_t$ is $$ in equilibrium consumption and $q,$ in equilibrium investment.

Suppose once again the savings $/$ investment and IS$-$MP markets of Gilavar are both in equilibrium at output equal to $50$ and an interest rate of $5\%,$ and that the government of Gilavar decides to decrease current spending from $G_{t,0}$ to $G_{t,1}.$ In this case, assume the government of Gilavar runs a surplus to offset the decrease.

Select the statement that best describes the immediate effects of the decrease in government spending in the savings$/$investment model under the surplus relative to the balanced budget case.

The savings supply curve shifts to the right by a greater amount.

The savings supply curve shifts to the right by the same amount.

The savings supply curve does not shift.

The savings supply curve shifts to the left instead of the right under the surplus.

The savings supply curve shifts to the right by a smaller amount.

When the government of Gilavar runs a surplus, the ultimate effect is that equilibrium investment $q,$