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 number. Use a positive number to show an increase and a negative number to show a decrease. a. If business leaders invest a 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? $ 160 billion b. Suppose that the recent economic outlook in the country of Mountainia has 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? $ 160 billion

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 number. Use a positive number to show an increase and a negative number to show a decrease. a. If business leaders invest a 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? $ 160 billion b. Suppose that the recent economic outlook in the country of Mountainia has 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? $ 160 billion

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Discuss MFIs objectives, challenges it is facing in achieving its objectives and how technology can help it overcome some of the challenges
Trying to figure out?
how to keep a realistic budget with personal economy?
Why do you think technology is important in your studies?
You and your family was going to a vacation. Explain how you arrive with your decision and explain where and when. Discuss the roles of family members in terms of: •end-users •customer •Influencer
Which type of savings account and interest rate are an incentive for people to save money?
Explain what an organization is and identify its characteristics.
evaluate accelerate community development
blanks C and D?
What factors should one consider before making a major purchase?
how many days in a year