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Macroeconomics

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Moderate

Drop in Household Savings in an Open Economy

MACRO-SEKEAW

If household savings falls in a small open economy, then

A

the domestic interest rate falls and the current account deteriorates.

B

the international domestic rate falls and the current account remains unchanged.

C

the domestic interest rate remains unchanged and the current account deteriorates.

D

the domestic interest rate remains unchanged and the current account remains unchanged.

E

None of the above