Other things the same,a decrease in the price level causes the interest rate to
A)increase,the dollar to appreciate,and net exports to increase.
B)increase,the dollar to depreciate,and net exports to decrease.
C)decrease,the dollar to depreciate,and net exports to increase.
D)decrease,the dollar to appreciate,and net exports to decrease.

Question

Quizplus · Accepted Answer

When the price level decreases, the interest rate will decrease because there will be less demand for loans. This will cause the value of the dollar to decrease as investors look for higher returns elsewhere. A cheaper dollar will make exports cheaper and more attractive, increasing net exports.

Other Things the Same,a Decrease in the Price Level Causes