Other things being equal,what is the effect of an exogenous rise in the domestic price level?
A)Canadian goods become more expensive relative to foreign goods.
B)The net export function shifts upward.
C)The aggregate expenditure function shifts upward.
D)Imports of foreign goods fall.
E)The desired investment function shifts upward.

Question

Quizplus · Accepted Answer

An exogenous rise in the domestic price level causes Canadian goods to become relatively more expensive compared to foreign goods, resulting in a decrease in demand for Canadian goods and an increase in demand for foreign goods. This leads to a decrease in net exports, which negatively impacts the overall economy.

Other Things Being Equal,what Is the Effect of an Exogenous