If expansionary aggregate demand-oriented macroeconomic policy is to be used to move The economy towards simultaneous external and internal balance, in which one of the Following situations would the policy indeed move the economy towards the attainment Of both goals?

Question

Quizplus · Accepted Answer

In this situation where there is a surplus in the current account and unacceptably high unemployment, expansionary aggregate demand-oriented macroeconomic policy can help achieve both external and internal balance. The policy will increase output and employment levels, leading to a reduction in unemployment. The increase in aggregate demand will also lead to an increase in exports, which will help to address the surplus in the current account.

If Expansionary Aggregate Demand-Oriented Macroeconomic Policy Is to Be Used