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AP® Macroeconomics

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Fiscal Policy: Recession

APMACR-S31HAN

From a Keynesian economic perspective, which of the following results would occur if the appropriate fiscal policy was implemented by Country A, who is experiencing a recession with a budget deficit?

A

Increase in demand for loanable funds.

B

Decrease in the interest rate.

C

Decrease in demand for the Country A's currency.

D

Increase in personal income taxes.

E

Decrease in the budget deficit.