In the Two-Period SOE Model, If the Real Interest Rate

question 20

Multiple Choice

In the two-period SOE model, if the real interest rate decreases and the current account is initially in deficit, then

• A)the current account deficit falls.
• B)the current account surplus stays the same.
• C)the current account deficit stays the same.
• D)the current account surplus rises.
• E)the current account surplus falls.

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