If the Price Level Increases in the United States Relative

question 112

Multiple Choice

If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. This statement describes

• A) the output effect.
• B) the foreign purchases effect.
• C) the real-balances effect.
• D) the shift-of-spending effect.

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Definitions:

Impossibility of Performance

A legal doctrine that releases parties from their contractual obligations when an event occurs that makes performance objectively impossible.

Absconded

To leave hurriedly and secretly, typically to escape from custody or avoid arrest.

Digestive Problem

Health issues related to the digestive system that impair its ability to function properly.

Offer of Performance

A gesture by a party involved in a contract to fulfill their part of the agreement, often used as evidence of willingness to comply with the contractual terms.