If the US Price Level Decreases, Other Things Equal, U

question 24

Multiple Choice

If the U.S. price level decreases, other things equal, U.S. net exports will

• A)increase
• B)decrease
• C)remain constant, since net exports are assumed to be constant
• D)increase only if the marginal propensity to import also increases
• E)increase only if there is inflation abroad

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Definitions:

Microeconomics

The branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.

Wage Cut

A reduction in the rate of pay received by an employee.

Quality Distribution

The spread or variance in quality levels among products, services, or outputs within a company or sector.

Appraiser

A professional who assesses the value of a particular item, often for property, art, or antiques.