A Fall in Consumer Confidence About the Future, Which Induces

question 88

Multiple Choice

A fall in consumer confidence about the future, which induces consumers to spend less and save more, will, according to the Mundell-Fleming model with floating exchange rates, lead to:

• A) a fall in consumption and income.
• B) no change in consumption or income.
• C) no change in income but a rise in net exports.
• D) no change in income or net exports.

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