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Expenditure-Switching & Changing Policy

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Explain the difference between expenditure-switching policies and expenditure-changing policies.

© BrainMass Inc. brainmass.com September 22, 2018, 7:04 am ad1c9bdddf - https://brainmass.com/economics/international-economics/expenditure-switching-changing-policy-583273

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Expenditure-switching policy is a policy targeting for external balances by using exchange rate. External balances is achieved whenever current account of the balance of payment is in balance. That is, export demand and import demand are in balance. If ...

Solution Summary

Expenditure-switching policy is a policy for external balances while the expenditure-changing policy is a policy for internal balances. These differences are explained in 158 words within.

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