If the Price Level in the United States Falls Relative

question 89

Multiple Choice

If the price level in the United States falls relative to the price level in foreign nations, U.S. exports:

• A)increase and U.S. imports decrease, causing the demand for dollars to rise and the supply of dollars to fall.
• B)decrease and U.S. imports increase, causing the demand for dollars to fall and the supply of dollars to rise.
• C)decrease and U.S. imports decrease, causing the demand for dollars to rise and the supply of dollars to rise.
• D)increase and U.S. imports decrease, causing the demand for dollars to fall and the supply of dollars to rise.

---

Definitions:

Fiscal Policy

Government strategies to influence economic conditions through spending and taxation decisions to manage economic growth, inflation, and unemployment.

Anticipated Policy

A governmental or organizational policy that is expected to be implemented in the future, often already influencing current behaviors and decisions.

Price Level

A measure of the average prices of goods and services in the economy at a given time.

Output

The total amount of goods and services produced by an economy, a sector, or a company over a specific period of time.