According to the structural stagnation model, an increasing trade deficit translates into ________ unemployment and ________ globally-constrained potential output.
A)lower; higher
B)lower; lower
C)higher; higher
D)higher; lower

Question

Quizplus · Accepted Answer

An increasing trade deficit in the structural stagnation model leads to higher unemployment and lower globally-constrained potential output, as domestic industries face more competition from imports, reducing domestic production and employment.

According to the Structural Stagnation Model, an Increasing Trade Deficit