Suppose that there are two large economies in the world, country A (the foreign country) and country B (the home country

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Suppose that there are two large economies in the world, country
A
(the foreign country) and country B (the home country). Suppose
that
initially, both countries have a zero current account balance
and the
world real rate of interest is 5 percent. Suppose now that there
is a
technological innovation in country A (the foreign country)
only.
In this case, which of the following is correct?
A. The world real interest rate will rise and country B (the
home coun-
try) will have a current account balance surplus.
B. The world real interest rate will rise and country A (the
foreign
country) will have a current account balance surplus.
C. The world real interest rate will fall and country B (the
home coun-
try) will have a current account balance surplus.
D. The world real interest rate will fall and country A (the
foreign
country) will have a current account balance decit.
E. None of the above.