Suppose a country is experiencing a situation where output is above the full employment level of output and a trade deficit. Further assume that the policy makers' goals are to achieve full employment output and balanced trade. Given this information, what type of exchange rate and/or fiscal policy can be used to achieve simultaneously these two goals? Explain
What will be an ideal response?
Y must fall and NX must rise. An appreciation will not work. It would cause Y to fall but will NX will decrease even more. A fiscal contraction would work because it would reduce Y and also reduce imports which will cause NX to rise.
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Which of the following was NOT an issue that the United States. had with the Kyoto Protocol?
a. Major U.S. trading partners (such as China and India) are exempt from the provisions—not fair! b. Europe's targets were set ridiculously low. c. We don't really know if pollution causes global warming. d. There are less costly ways to deal with environmental problems.
Georgia's great uncle gave her a $5,000 savings bond as a wedding gift. The bond pays $5,000 at maturity, which is in 10 years. If the interest rate is 4%, the bond has a present value of $ 3,377.82
Indicate whether the statement is true or false