Suppose Consumer Confidence Falls Causing a Decrease in Consumption

Multiple Choice

Suppose consumer confidence falls causing a decrease in consumption. From the goods market model we know with certainty that a decrease in consumption will cause:

A) a reduction in the multiplier.
B) a decrease in the propensity to save.
C) an increase in the multiplier.
D) an increase in the propensity to save.
E) a decrease in output.