Consumer sentiment is an economic indicator that measures consumers' degree of optimism regarding the overall state of a country's economy and their own financial situation. University of Michigan’s data released last Friday shows a decrease in the Consumer Sentiment Index to 59.1 in May compared to 65.2 in April - the lowest since 2011. According to the Mundell–Fleming model for a small open economy with perfect capital mobility and floating exchange rates, a decrease in consumer sentiment will lead to:
a.
no change in income but a rise in net exports.
b.
no change in income or net exports.
c.
a fall in consumption and income.
d.
no change in consumption or income
