29. Use the model of a small open economy to predict the effect of a fall in consumer confidence that causes consumers to save more. a. Interest rates will fall and investment will rise. b. Interest rates will fall and net exports will rise c. an excess supply of domestic loanable fund will lead to a rise in net exports d. an excess demand for loanable funds will lead to a fall in net exports 30. Suppose that the price of a pair of Nike sneakers is $200 in the U.S. If the price of the same shoes in Mexico is 3,200 pesos, use the theory of purchasing power parity to predict the exchange rate of the Mexican peso to the U.S. dollar. a. 0.063 pesos to the dollar b. 16 pesos to the dollar c. 640,000 pesos to the dollar d. We do not have enough information to predict the exchange rate