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) decreases consumption and decreases the current account surplus.
C
You might also like to view...
In long-run equilibrium,
a. perfectly competitive firms in a decreasing-cost industry can earn economic profits b. perfectly competitive firms in an increasing-cost industry can earn economic profits c. perfectly competitive firms in a constant-cost industry can earn economic profits d. perfectly competitive firms can earn only normal profits e. no entry occurs in an increasing-cost perfectly competitive industry
The mutually understood customs the two parties involved in a transaction follow from experience are known as _____
a. focal points b. norms c. cores d. strategies