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.

. 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 $12 billion of planned investment spending, what is the maximum expected change in GDP if Mountainia's marginal propensity to save is 0.25?

The answer is not 48 million. Would the answer be negative?

Answer rating: 100% (QA)

Youre correct the answer wont be 48 million and will likely be negative Heres why Investment D... View the full answer