Government Policy Objective Of Stability Of The Current Account
Economics notes
Government Policy Objective Of Stability Of The Current Account
➡️ Expansionary fiscal policy: This involves increasing government spending and/or reducing taxes to stimulate economic activity and increase exports.
➡️ Exchange rate policy: This involves devaluing the domestic currency to make exports more competitive and imports more expensive.
➡️ Trade policy: This involves introducing tariffs and other trade barriers to reduce imports and increase exports.
What is the government policy objective of stability of the current account?
The government policy objective of stability of the current account is to maintain a balance between the inflow and outflow of money from a country. This is done by ensuring that the amount of money coming into the country is equal to the amount of money leaving the country. This helps to maintain a stable exchange rate and a healthy economy.
How does the government achieve stability of the current account?
The government achieves stability of the current account by implementing policies that encourage foreign investment, such as tax incentives and trade agreements. The government also works to reduce the amount of money leaving the country by controlling the amount of money that can be taken out of the country.
What are the benefits of stability of the current account?
The benefits of stability of the current account include a stable exchange rate, increased foreign investment, and a healthy economy. A stable exchange rate helps to reduce the risk of currency fluctuations, which can have a negative impact on businesses and consumers. Increased foreign investment helps to create jobs and stimulate economic growth. A healthy economy helps to ensure that the country is able to provide its citizens with the resources they need.