QUESTION 2 Assume that the U.S. economy is in a deep recession, that the marginal propensity to consume is 0.5 and government spending increases by $100 billion. In the Keynesian model of aggregate demand discussed in class what happens to output (real GDP) due to this spending increase everything else equal? O Output increases by $50 billion. O Output increases by $100 billion. O Output increases by $150 billion. O Output increases by $200 billion. O Output remains constant due to crowding out. QUESTION 3 Assume that the U.S. economy is in a deep recession, that the marginal propensity to consume is 0.5 and government spending increases by $100 billion. In the Keynesian model of aggregate demand discussed in class what happens to consumption due to this spending increase, everything else equal? O Consumption increases by $50 billion. O Consumption increases by $100 billion. O Consumption increases by $200 billion. O Consumption remains constant. O Consumption falls by $50 billion