5. (LLO 3) L Figure 9.16 illustrates the money demand and investment demand for the economies of Pabst and Kokance. Page 397 Pabst MS 10 10 Interest rate Interest rate B 6 6 MD 80 100 120 140 10 30 50 70 Quantity of money Quantity of investmentKokance MS 10 10 Interest rate 8 Interest rate 8 6 6 MD 80 100 120 140 0 10 30 Quantity of money 50 70 Quantity of investmentFIGURE 9.16 a ) If money supply is increased by 10, what will be the new interest rate? Pabst: Kokanee: b) What will be the increase in investment spending as a result of this new interest rate? Pabst: Kokanee: c) If the multiplier is 2 in each economy, what will be the increase in GDP? Pabst: Kokanee: d) In which economy would monetary policy be more effective in closing a recessionary gap