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

Multiple Choice

In a two-period model, holding everything else constant, an increase in future 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) increases the present value of taxes.
E) has no effect on the current account surplus, as long as Ricardian equivalence holds.