Question

A nation experiences overall balance if it achieves:

a. Balance-of-payments equilibrium, full employment, and price stability
b. Balance-of-payments equilibrium, maximum productivity, and price stability
c. Full employment, price stability and no change in its money supply
d. Full employment, price stability, and maximum productivity

Answer 1

A nation experiences overall balance if it achieves balance-of-payments equilibrium, full employment, and price stability. These factors contribute to the economic health and stability of a nation.

Step-by-step explanation:

Economic Stability and Overall Balance

Achieving economic stability is essential for the health of a nation's economy and is typically characterized by three major goals: economic growth, low unemployment, and low inflation. These factors contribute to the overall balance and general well-being of a nation. For a nation to experience overall balance, it must strive for these economic goals:
Balance-of-payments equilibrium

• 1 Full employment

• 2 Price stability
• 
  

While balance-of-payments equilibrium ensures that the value of exports equals the imports leading to a sustainable trade situation, full employment denotes a situation where all who are willing and able to work at prevailing wage rates are employed. Price stability means keeping inflation at bay, allowing for consistent and predictable prices over time. Maximum productivity, while important, is not a defined condition for overall balance as it can occur even under circumstances of imbalance, such as trade deficits or surpluses.

Therefore, the correct answer is: a nation experiences overall balance if it achieves balance-of-payments equilibrium, full employment, and price stability.