What Impact Does an Increase in the Price Level in Canada

question 229

Multiple Choice

What impact does an increase in the price level in Canada have on net exports and why?

• A)An increase in the price level decreases net exports because higher prices decrease the value of the dollar.
• B)An increase in the price level decreases net exports by increasing the relative cost of Canadian goods.
• C)An increase in the price level increases net exports because higher prices lower the value of the dollar.
• D)An increase in the price level increases net exports because higher prices decrease Canadian spending on imports.
• E)An increase in the price level decreases net exports by reducing Canadian's nominal income.

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Definitions:

Agricultural Adjustment Act

A United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses.

Price Supports

Government interventions to maintain the market prices of agricultural products above equilibrium levels, often through purchasing surpluses or subsidizing costs.

Environmental Pollution

involves the contamination of the natural environment, leading to harmful effects on living beings and ecosystems.

Organic Farming

A method of farming that relies on natural substances and processes to produce crops and livestock, avoiding synthetic fertilizers and pesticides.