A Price Level Increase Tends to Reduce Net Exports, Thereby

question 9

Multiple Choice

A price level increase tends to reduce net exports, thereby reducing the amount of real goods and services purchased in the United States. Economists refer to this phenomenon as

• A) the wealth effect.
• B) the barrier effect.
• C) the open-economy effect.
• D) the Gross Domestic Product (GDP) effect.

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