In Two-Period SOE Model with Production, an Increase in the World

question 17

Multiple Choice

In two-period SOE model with production, an increase in the world real interest rate

• A)increase aggregate consumption and have no effect on the current account surplus.
• B)decreases domestic output and decreases the current account surplus.
• C)increases domestic output and decreases the current account surplus.
• D)increases domestic output and increases the current account surplus.
• E)decreases domestic output and increases the current account surplus.

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