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

question 204

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

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Definitions:

Total Cost

The total amount of money spent on creating goods or services, encompassing both constant and fluctuating expenses.

Producing

Producing involves the creation, manufacturing, or assembly of goods and services for sale or distribution.

Pairs

Two things considered together because of similarity, opposition, or adjacency; often used in context to describe complementary items or concepts.

Marginal Cost

The outlay for creating another unit of a product or service.