In a Two-Period Model, Holding Everything Else Constant, an Increase

question 45

Multiple Choice

In a two-period model, holding everything else constant, an increase in current taxes

• A) unambiguously increases the current account surplus.
• B) unambiguously decreases the current account surplus.
• C) has an uncertain effect on the current account surplus.
• D) increases the present value of taxes.
• E) has no effect on the current account surplus.

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Definitions:

Abundant Elements

Chemical elements that occur in large quantities in the Earth's atmosphere, crust, or oceans, or in the universe at large.

Human Body

The entire structure of a human being encompassing physical, biological, and chemical processes that work together to maintain life.

Carbon

A chemical element with symbol C and atomic number 6, essential to all known life forms and the basis of organic chemistry.

Cation

Ion carrying a positive charge.