1. Explain why a decline in investment spending caused by a change in business expectations leads to a fall in consumer spending. 2. What is the multiplier if the marginal propensity to consume is 0.5? What is it if MPC is 0.8? 3. As a percentage of GDP, savings accounts for a larger share of the economy in the country of Scania compared to the country of Amerigo. Which country is likely to have the larger multiplier? Explain. Solutions appear at back of book.