To eliminate unemployment and deficit in the balance of payments, the nation must adopt

Under Robert Mundell's policy-assignment rule for internal and external balance, fiscal policy is assigned to internal balance (employment) and monetary policy is assigned to external balance (the balance of payments) through interest-sensitive capital flows. Therefore, to eliminate unemployment alongside a balance-of-payments deficit, a country should adopt an expansionary fiscal policy to raise domestic employment combined with a tight monetary policy (higher interest rates) to attract capital inflows and eliminate the external deficit.