Describe the policies a nation would follow to correct a current account deficit. What are the primary purposes of each type of policy?
What will be an ideal response?
Policy makers need to turn domestic expenditures away from foreign-produced products toward domestic products (expenditure switching) and reduce the overall level of demand in the economy (expenditure reducing). Expenditure reducing policies are intended to avoid inflation. Expenditure switching policies are intended to avoid recession.
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Which of the following kinds of agreements between two or more countries would be an example of a shallow integration measure?
A) An agreement to accept another nation's certification of architects B) An agreement to unify customs forms in order to speed up cross-border traffic C) An agreement to use the same environmental standards D) An agreement to impose the same limits on cartels and monopolies E) An agreement to limit subsidies offered to domestic businesses
The number of workers hired by a firm at a particular wage rate can be calculated if you know which of the following?
a. c and d. b. Product supply curve. c. Marginal product of labor. d. Marginal factor cost. e. Marginal revenue product of labor.