2. If saving dropped sharply in the economy, what would likely happen to investment? Why?

3. Suppose local governments throughout the United States increase their tax on business inventories. What would you expect to happen to U.S. investment? Why?

4. Suppose the government announces it will pay for half of any new investment undertaken by firms. How will this affect the investment demand curve?

5. White House officials often exude more confidence than they actually feel about future prospects for the economy. Why might this be a good strategy? Are there any dangers inherent in it?