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Businesses in the nation of Islandia have been accumulating cash because they have a pessimistic outlook of the national economy Due to recent changes in
Businesses in the nation of Islandia have been accumulating cash because they have a pessimistic outlook of the national economy Due to recent changes in the economic outlook of Islandia, business leaders have started investing some of their accumulated cash. Instructions: Enter your answers as a whole nmber. Use a positive number to show an increase and a negative number to show a decrease. a. If business leaders invest o total of $10 billion of accumulated cash, what is the maximum expected change in GDP if Islandia's marginal propensity to consume is 0.75 ? $ billion b. Suppose that the recent economic outlook in the country of Mountainia hos been the opposite. Businesses are instead accumulating cash and postponing planned investments. If business leaders postpone $5 billion of planned investment spending. what is the maximum expected change in GDP if Mountainia's marginal propensity to save is 0.1 ? $ billion
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