What impact does a decrease in the price level in the United States have on net exports and why?
A) A decrease in the price level reduces net exports because lower prices increase American spending on imports.
B) A decrease in the price level increases net exports because lower prices increase the value of the dollar.
C) A decrease in the price level reduces net exports because lower prices raise the value of the dollar.
D) A decrease in the price level increases net exports by reducing the relative cost of American goods.
D
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If there is a decline in the price of milk, an input in the production of ice cream, then there will be a(n)
A) decrease in the supply of ice cream and a leftward shift of the supply curve. B) decrease in the quantity of ice cream supplied and a movement up along the supply curve. C) increase in the supply of ice cream and a rightward shift of the supply curve. D) increase in the quantity of ice cream supplied and a movement down along the supply curve.
If autonomous consumption is greater than zero and the marginal propensity to consume is greater than zero, but less than one, the consumption function will first be below and then above the 45 degree line
a. True b. False Indicate whether the statement is true or false