Problem
1. In Country X, the marginal propensity to save is 0.10 and the marginal propensity to import is 0.15. If only the income effect is operating, what would the effect be on X's balance of trade of an increase in domestic investment of $200 million? Explain.
2. In a two-country world of the United States and Canada, if a recession begins in the United States, will the existence of repercussions increase or decrease the depth of the US decline? Why?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.