If the Price Level in the United States Increases Relative

question 193

Multiple Choice

If the price level in the United States increases relative to prices in foreign countries, then

• A) imports and exports of the United States will increase.
• B) imports and exports of the United States will decrease.
• C) imports of the United States will decrease and exports of the United States will increase.
• D) imports of the United States will increase and exports of the United States will decrease.

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Definitions:

Unit Increase

A measure reflecting the change or increment in a particular variable by a single unit.

Holding Constant

A technique in statistical analysis where specific variables are kept unchanged in order to isolate the effects of other variables.

Polynomial Model

A regression model in which the relationship between the independent variable and the dependent variable is modeled as an nth degree polynomial.

Predictor Variable

A variable that is used in statistical models to predict the outcome of a response variable.