If U.S.prices increase relative to the rest of the world,we would expect:
A)imports to increase and exports to fall.
B)imports to decrease and exports to increase.
C)imports and exports to increase.
D)imports and exports to decrease.

Question

Quizplus · Accepted Answer

If U.S. prices increase relative to the rest of the world, foreign goods become relatively cheaper, leading to an increase in imports. Conversely, U.S. goods become more expensive for foreign buyers, leading to a decrease in exports.

If USPrices Increase Relative to the Rest of the World,we Would