When the U.S.price level increases relative to the price level in foreign economies,U.S.consumers tend to buy:
A) Fewer imported goods and fewer domestically produced goods,ceteris paribus.
B) Fewer imported goods and more domestically produced goods,ceteris paribus.
C) More imported goods and fewer domestically produced goods,ceteris paribus.
D) More imported goods and more domestically produced goods,ceteris paribus.

Question

Quizplus · Accepted Answer

When the U.S. price level increases relative to foreign economies, imported goods become relatively cheaper compared to domestically produced goods. As a result, U.S. consumers are likely to buy more imported goods and fewer domestically produced goods, all else being equal.