(a)[12]
In 2013, a new aircraft, the Boeing 787 Dreamliner, was assembled in the United States (US). United Airlines, an American private company, placed an order for 50 of these aircraft, with each one costing more than US$200 million. Suppose the US were a closed economy with no government intervention. Analyse why the rise in national income from this investment in new aircraft could be different from what would happen in an open, mixed economy.
(b)[13]
Discuss the policies that a government may use to affect the level of investment in an economy.