AP Macroeconomics Question 290: Answer and Explanation
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3. Which of the following events most likely increases real GDP?
- A. An increase in the real rate of interest
- B. An increase in taxes
- C. A decrease in net exports
- D. An increase in government spending
- E. A lower value of consumer wealth
Correct Answer: D
D —An increase in GDP is the result of an increase in C, I, G , or (X - M ). All other choices represent less spending in some economic sector.