1. Saving Behavior and Multipliers in Two Countries. Consumers in Country A have an MPS of 0.5 while consumers in Country B have an MPS of 0.4. Which country has the higher value for the multiplier?...

1. Saving Behavior and Multipliers in Two Countries. Consumers in Country A have an MPS of 0.5 while consumers in Country B have an MPS of 0.4. Which country has the higher value for the multiplier?

2. State and Local Governments during Recessions. During recessions, state governments often will have to raise taxes and cut spending in order to keep their own budgets balanced. If a large number of states do this, what will happen to the aggregate demand curve at the national level?