If USPrices Increase Relative to the Rest of the World,we Would

question 39

Multiple Choice

If U.S.prices increase relative to the rest of the world,we would expect:

• A)imports and net exports to increase.
• B)exports and net exports to decrease.
• C)imports to increase and net exports to decrease.
• D)exports to decrease and net exports to increase.

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Definitions:

Money Market

A financial market for debt securities with maturities of less than 1 year (short term). The New York money market is the world’s largest.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental.

Secondary Market

The financial market where investors buy and sell securities they already own, as opposed to the primary market where securities are first issued.

Intrinsic Value

The inherent worth of a company, stock, currency, or product determined through fundamental analysis without reference to its market value.