At the full-employment level,if the domestic absorption remains constant,the currency devaluation will not change the balance of trade.

Question

Quizplus · Accepted Answer

At full-employment level, the economy is already producing at its maximum capacity and any change in the currency value will not lead to a significant increase in exports or decrease in imports since the domestic production cannot be increased further. Therefore, the balance of trade remains unaffected by the currency devaluation.

At the Full-Employment Level,if the Domestic Absorption Remains Constant,the Currency