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Suppose that corporate downsizing and lack of job security in Europe cause consumers to spend less and save more. Using the long-run model of a
Suppose that corporate downsizing and lack of job security in Europe cause consumers to spend less and save more. Using the long-run model of a large open economy and assuming that both Europe and the U.S. are two large open economies, illustrate and explain how this change in consumer preferences in Europe affects r, CF, I, , and NX in the U.S. economy
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