If US Prices Increase Relative to the Rest of the World

question 128

Multiple Choice

If U.S. prices increase relative to the rest of the world, what effect would we expect to see on traded goods?

• A) Imports and net exports would increase.
• B) Exports and net exports would decrease.
• C) Imports would decrease and net exports would increase.
• D) Exports would decrease and net exports would increase.

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Definitions:

Nonpayment

The failure to fulfill a financial obligation, such as not paying a bill, loan, or other types of debt when due.

Net Income

The amount of earnings left over after all expenses, including taxes and interest, have been deducted from total revenues.

Net Loss

The amount by which a company's expenses exceed its revenues during a specific accounting period, indicating a negative financial performance.

Investment

The process of distributing funds with the goal of earning additional income or profits.