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AP® Macroeconomics

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Fiscal Policy and Economic Impacts

APMACR-JYOGLK

If during a recession government spending increased by \$50 Billion, but the economy rose by \$200 Billion in response, then assuming no new taxes were part of the spending adjustment

A

MPS declined.

B

the economy is in the Keynesian Range.

C

productivity will fall due to the increased spending.

D

MPC is .75.

E

the government will immediately incur a deficit.