During the 1970s, U

question 189

Multiple Choice

During the 1970s, U.S. prices generally rose faster than prices in other parts of the world. Which of the following changes would the open economy effect predict took place in response to these price level changes?

• A)​Americans reduced the proportion of foreign goods bought since their foreign prices became relatively lower.
• B)​Americans reduced the amount of investment they undertook because interest rates increased.
• C)​Americans reduced the amount of goods and services they wanted to purchase for consumption because they felt less wealthy.
• D)​Americans reduced the fraction of purchases they made from domestic producers of goods and services, since foreign prices became relatively lower.

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Definitions:

Isotope

Variants of a particular chemical element which differ in neutron number, and consequently in mass, but not in electrical charge.

Sr

Strontium, a chemical element with symbol Sr and atomic number 38, known for its bright-red flames in fireworks.

Isotope

Variants of a particular chemical element which differ in neutron number, and consequently in nucleon number, but have the same number of protons.