To Correct a Balance of Payments Surplus and Unemployment a Nation

question 16

Multiple Choice

To correct a balance of payments surplus and unemployment a nation requires a:

• A)devaluation and expansionary fiscal and monetary policies
• B)devaluation and contractionary fiscal and monetary policies
• C)devaluation or revaluation and expansionary fiscal and monetary policies
• D)revaluation and either expansionary or contractionary fiscal and monetary policies

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Definitions:

Domestic Investment

The total spending on capital goods within a country’s borders, which includes expenditures on new buildings, equipment, and technology.

Trade Deficit

An economic measure of a negative balance of trade where a country's imports exceed its exports.

Trade Surplus

A situation where the value of a country's exports exceeds the value of its imports, indicating a positive balance of trade.

Net Exports

The difference between a country’s total exports of goods and services and its total imports of them. Positive net exports indicate a trade surplus, while negative net exports indicate a trade deficit.