Assume that we are aware of the extreme level of uncertainty. Explain how uncertainty might change expected spending, saving, or investing plans by taking each of the following perspectives:

First, assume that you are a consumer/saver. As you save, you might invest money in stocks, or you might purchase bonds. These activities allow banks and other financial institutions to pool money together for lending out to firms. Speaking as a consumer and saver:

• In this environment of uncertainty, what might increase your willingness to spend money (consume) or alternatively to increase savings that you channel into the banking system or financial markets?
• In this environment of uncertainty, what might decrease your willingness to spend money (consume) or to increase savings that you channel into the banking system or financial markets?

Next, assume that you are the owner of a medium-sized firm producing luxury personal care items, such as shampoos, conditioners, hair masks, hair dyes, nail treatments, face masks, and bath products. You have become uncertain about the future of your business given recent economic events, and you are considering delaying plans to expand. Speaking as a firm owner, manager, or shareholder:

• In this environment of uncertainty, will you maintain planned levels of output or increase or reduce your output?
• In this environment of uncertainty, will you plan to expand facilities, equipment, or other projects designed to increase your firm's productive capacity or profitability?