1) Investment can be increased both by reducing taxes on private saving and by reducing the government budget deficit.

a)Why is it difficult to implement both of these policies at the same time?

b) What would you need to know about private saving in order to judge which of these two policies would be a more effective way to raise investment?

2) When company executives buy and sell shares based on private information they obtain as part of their jobs, they are engaged in insider trading.

a) Insider trading is illegal. Why do you suppose that is?