“To achieve both internal and external balances, the authorities must use both expenditure switching and expenditure changing policies.As Discuss In open economy macroeconomics, the stability of the system is always in jeopardy. To achieve full employment, with coinciding price stability and equilibrium in the balance of payments, policy planners have to make specific adjustments to policy. Balance is achieved when the country”s resources are fully employed and there is price level stability. Firstly, they could use expansionary fiscal policy to attain external balance.