Other things the same,if the U.S.price level rises,then
A)the supply of dollars in the market for foreign-currency exchange increases,and net exports fall.
B)the supply of dollars in the market for foreign-currency exchange increases,and net exports rise.
C)the supply of dollars in the market for foreign-currency exchange decreases,and net exports fall.
D)the supply of dollars in the market for foreign-currency exchange decreases,and net exports rise.

Question

Quizplus · Accepted Answer

When the U.S. price level rises, the demand for U.S. goods and services decreases, as they become relatively more expensive compared to foreign goods and services. This causes a decrease in net exports, as fewer U.S. goods and services are being bought by foreign countries. As a result, there is a decrease in the demand for U.S. dollars in the market for foreign-currency exchange, leading to a decrease in the supply of dollars.

Other Things the Same,if the U.S.price Level Rises,then