Other things being equal, when the domestic price level rises exogenously,
A)imports of foreign goods fall.
B)Canadian goods become more expensive relative to foreign goods.
C)the aggregate expenditure function shifts upward.
D)the net export function shifts upward.
E)the desired investment function shifts upward.

Question

Quizplus · Accepted Answer

When the domestic price level rises, domestic goods become more expensive relative to foreign goods, making Canadian goods less competitive internationally.

Other Things Being Equal, When the Domestic Price Level Rises