If there is an increase in taxes on business firms in a small open economy,it causes the current account to ________ and saving ________.
A)fall;fall
B)rise;remain unchanged
C)fall;remain unchanged
D)rise;fall

Question

Quizplus · Accepted Answer

An increase in taxes on business firms reduces investment, leading to a rise in the current account balance as savings remain unchanged in a small open economy.

If There Is an Increase in Taxes on Business Firms