With a Fixed Exchange Rate,an Increase in the Domestic Price

question 23

Multiple Choice

With a fixed exchange rate,an increase in the domestic price level will,for a constant foreign price level,

• A)increase exports and decrease imports.
• B)make foreign goods relatively more expensive to U.S.citizens but U.S.exports will be relatively cheaper to foreigner buyers.
• C)increase both exports and imports.
• D)make foreign goods relatively cheaper to U.S.citizens but U.S.exports will be more expensive to foreign purchasers.

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Definitions:

Subsidence

The sinking or settling of the Earth's surface, often caused by natural processes such as erosion or human activities like mining.

Subduction Zones

Regions of the Earth's crust where one tectonic plate moves under another, leading to volcanic activity and earthquakes.

Mantle Upwellings

The upward movement of the Earth's mantle material, which can lead to volcanic activity and the formation of new crust at mid-ocean ridges.

Continental Collisions

The process where two or more continental plates converge, leading to mountain building, seismic activity, and crustal deformation.