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

In a two-period model, holding everything else constant, an increase in future taxes

A) has no effect on the current account surplus, as long as Ricardian equivalence holds.
B) increases the present value of taxes.
C) unambiguously decreases the current account surplus.
D) unambiguously increases the current account surplus.
E) has an uncertain effect on the current account surplus.

Correct Answer:

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