In a Two-Period SOE Model with Production, an Increase in Domestic

question 22

Multiple Choice

In a two-period SOE model with production, an increase in domestic government spending

• A)increases domestic output and increases the current account surplus.
• B)increases domestic output with no change in the current account surplus.
• C)increases domestic output and decreases the current account surplus.
• D)decreases domestic output and increases the current account surplus.
• E)decreases domestic output and decreases the current account surplus.

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Definitions:

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