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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When unions or legislation makes it necessary for a firm to pay higher wages,
A) efficiency declines. B) income is transferred from wealthy people to poor people. C) the marginal value of retained employees falls. D) the marginal value of retained employees rises. E) total purchasing power increases.
"Divisions" of a University The separate colleges within universities are often operated as profit centers. While a student takes courses throughout the university, the budget of a specific dean is based on the students it serves. Two models are 1)
basing funds on the number of student hours generated by a college and 2) basing funds on the number of students completing majors within the college. How do these two models affect the incentives for which courses included in the degree programs?
A weakness of the price system is that it completely fails to take account consumer preferences in the distribution of goods and services.
Answer the following statement true (T) or false (F)
An economist might be hired to answer which of the following questions?
a. What will the price of oil be next year? b. Why is the median income of women about half the median income of men? c. How much will interest rates change as the federal deficit decreases? d. How much will inflation change if import restrictions are imposed? e. All of the above are correct.