What Impact Does a Decrease in the Price Level in the United

question 257

Multiple Choice

What impact does a decrease in the price level in the United States have on net exports and why?

• A)A decrease in the U.S.price level increases net exports because lower prices increase the value of the dollar.
• B)A decrease in the U.S.price level increases net exports by reducing the relative cost of American goods.
• C)A decrease in the U.S.price level reduces net exports because lower prices raise the value of the dollar.
• D)A decrease in the U.S.price level reduces net exports because lower prices increase American spending on imports.

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Definitions:

Total Purchased Cost

The complete expense incurred to acquire goods or services, including the purchase price and any additional charges.

Unit Cost

The cost incurred by a company to produce, store, and sell one unit of a particular product or service.

Employer Contribution

The amount of money that an employer adds to an employee's benefits, such as retirement plans or health insurance.

Employee Contribution

The portion of income, investment, or expense that is provided by an employee, often related to benefits or retirement plans.