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True or false? Explain your answer. a. An closed economy have a lower unemployment rate in...

True or false? Explain your answer.

a. An closed economy have a lower unemployment rate in the long run than a opened economy.
b. The government may issue more currencies to make up for the budget deficit, which will
cause the exchange rate of the national currency to depreciate. The government may
issue national bonds to make up for the budget deficit, which will cause the exchange
rate of the national currency to appreciate.

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Answer #1

a) False..

(A closed economy in the long run have reduced the productivity level and get the saturation point which leds to the more unemployment)..

b) True..

(Issuing more currencies make the relative price of the currencies weaker in the international market and thus cause the exchange rate of the National currency to depreciate. Another way if the Government issue bonds then foreign investment is happened in this case that causes the exchange rate of the National currency to appreciate)...

(Please give an up vote if you find it helpful)....

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