The Foreign Purchases Effect on Aggregate Demand Suggests That A

question 122

Multiple Choice

The foreign purchases effect on aggregate demand suggests that a:

• A) Fall in our domestic price level will increase our imports and reduce our exports, thereby reducing the net exports component of aggregate demand
• B) Fall in our domestic price level will decrease our imports and increase our exports, thereby reducing the net exports component of aggregate demand
• C) Rise in our domestic price level will increase our imports and reduce our exports, thereby reducing the net exports component of aggregate demand
• D) Rise in our domestic price level will decrease our imports and increase our exports, thereby reducing the net exports component of aggregate demand

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