In a Two-Period Model, as Long as Wealth Effects Are

Multiple Choice

In a two-period model, as long as wealth effects are small, an increase in the world real interest rate

A) increases consumption and increases the current account surplus.
B) increases consumption and decreases the current account surplus.
C) decreases consumption and increases the current account surplus.
D) increases investment.
E) decreases consumption and decreases the current account surplus.