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Surplus on Current Account and its Effect on Unemployment

Question

Discuss whether or not an increase in a surplus on the current account of the balance of payments decreases unemployment.

Category:

Unemployment

Frequently asked question

Preview Answer

I. 🍃Introduction
- Brief explanation of the importance of exports in the economy
- Thesis statement outlining the reasons why exports may or may not be beneficial for the economy

II. Benefits of exports
- More exports lead to increased output and demand for labor
- Surplus in exports leads to more funds flowing into the economy, increasing aggregate demand and generating jobs
- Increased incomes and consumption lead to higher revenue for firms, which can be reinvested

III. Drawbacks of exports
- Exports may be capital-intensive, using less labor to produce
- Surplus in one country may create a deficit in another, leading to protectionist policies
- Increase in surplus may raise exchange rates, reducing net exports and increasing unemployment

IV. Case study: China's export-led growth
- Explanation of China's export-led growth model
- Analysis of the benefits and drawbacks of this model
- Discussion of the current challenges facing China's export sector

V. 👉Conclusion
- Recap of the benefits and drawbacks of exports
- Final thoughts on the role of exports in the economy
- Suggestions for future research and policy recommendations.

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