What Is the International Trade Effect

question 124

Multiple Choice

What is the international trade effect?

• A) It is the tendency for exports to fall and imports to rise when the domestic price level falls relative to the foreign price level.
• B) It is the tendency for exports to rise and imports to fall when the domestic price level falls relative to the foreign price level.
• C) It is the tendency for domestic investments to fall when foreign interest rates rise relative to domestic interest rates.
• D) It is the tendency for exchange rates to fall when foreign interest rates rise relative to domestic interest rates.

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