Other things the same, as the price level decreases it induces greater spending on
A)both net exports and investment.
B)net exports but not investment.
C)investment but not net exports.
D)neither net exports nor investment.

Question

Quizplus · Accepted Answer

When the price level decreases, it makes a country's goods cheaper relative to foreign goods, which increases net exports. Additionally, lower price levels reduce interest rates, which encourages more investment.

Other Things the Same, as the Price Level Decreases It