In a Two-Good,two-Period Model,holding Everything Else Constant,an Increase in Current

question 19

Multiple Choice

In a two-good,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) has no effect on the current account surplus, as long as Ricardian equivalence holds.
• E) only marginally increases the current account surplus.

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Definitions:

Future Plans

Intended strategies, actions, or activities aimed at achieving specific goals or outcomes in the future.