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Macroeconomics

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Moderate

Effects of a Drop in Consumer Confidence

MACRO-BX4GWK

In a closed economy, if consumers become less optimistic about the future (i.e. consumer confidence falls), then

A

the domestic interest rate falls and the current account deteriorates.

B

the domestic interest 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