According to the international effect explanation of the downward slope of the AD curve, a lower price level in the U.S. economy causes:
A) U.S. imports and U.S. exports to decrease.
B) U.S. imports and U.S. exports to increase.
C) U.S. imports to increase and U.S. exports to decrease.
D) U.S. imports to decrease and U.S. exports to increase.

Question

Quizplus · Accepted Answer

A lower price level in the U.S. makes U.S. goods cheaper for foreign buyers, increasing exports, while foreign goods become relatively more expensive for U.S. consumers, decreasing imports.

According to the International Effect Explanation of the Downward Slope