"To achieve both internal and external balance, the authorities must use both expenditure switching and expenditure changing policies, discuss"

... "To achieve both internal and external balance, the authorities must use both expenditure switching and expenditure changing policies, discuss" Salter (1959) and Swan (1960) analyzed the problem of macroeconomic imbalances and illustrated how these imbalances can be corrected by adjustment. Internal and external balance refers to two of the Government's crucial objectives. Internal balance can be found within an economy, it is reached when there is full employment, or of no more than 4-5%, the 4-5% is an allowance of frictional unemployment. The other half of internal balance requires a 2-3% inflation rate. These internal and external requirements promote another of the Governments objectives, a steady rate of economic growth. External balance regards equilibrium in the balance of payments, or in some cases disequilibrium "such as a surplus that a nation may want in order to replenish its depleted international reserves". (Salvatore) These internal and external requirements promote another of the Governments objectives,

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