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

Multiple Choice

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

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) must reduce the present value of taxes.
E) has no effect on the current account surplus.