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-period income

A) unambiguously decreases the current account surplus.
B) has an uncertain effect on the current account surplus.
C) is engineered by the government.
D) has no effect on the current account surplus.
E) unambiguously increases the current account surplus.