Which of the following will restore an economy to full employment if it is operating below full employment because of a decrease in net exports?

Question

Quizplus · Accepted Answer

A decrease in the real exchange rate makes exports cheaper and imports more expensive, which increases net exports, leading to an increase in real GDP and a decrease in unemployment. Increasing the interest rate, reducing investment, and reducing the demand for goods and services generally have contractionary effects on the economy and would not lead to an increase in net exports or full employment.

Which of the Following Will Restore an Economy to Full