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

Multiple Choice

In a two-period SOE model with production, an increase in the capital stock

A) can eliminate the current account deficit in the long run.
B) increases domestic output and decreases consumption.
C) decreases domestic output and increases the current account surplus.
D) decreases domestic output and decreases the current account surplus.
E) has no impact on domestic consumption.