Question

a country switches over from maintaining internal balance in case of _ equilibrium​

Answer 1

Answer:

structural is the answer

Answer 2

Answer: Structural or fundamental

Explanation:

Internal balance refers to achieving full employment with price stability. Generally a country assigns a priority to maintain internal balance by maintaining full employment level of employment and price stability. But when a country witnesses persistently fundamental or structural deficit in the balance of payments the concerned country has to switch over its priority from maintaining internal balance to maintaining external balance. Hence it is the fundamental or structural disequilibrium in the balance of payments that needs adjustment.

The cyclical or seasonal type of disequilibrium in the balance of payments is a transitory phenomenon which can be reversed or corrected automatically while it is not the case with regard to structural or fundamental disequilibrium in the balance of payments especially when it persists for a long time. Then it gets transformed into a chronic phenomenon. Hence it is the fundamental or structural disequilibrium in the balance of payments that needs adjustment.