The effect of a decrease in import prices on overall inflation can be best described as:
A)Nonexistent
B)A modest increase
C)A modest decrease
D)A significant decrease, particularly as globalization and trade increase

Question

Quizplus · Accepted Answer

A decrease in import prices would decrease the cost of goods for consumers, leading to a modest decrease in overall inflation. This is because decreased import prices would result in lower cost of production, which would, in turn, result in lower prices for goods and services. Although decreased import prices could result in a decrease in domestic production, it is unlikely to be significant enough to cause a significant decrease in overall inflation.

The Effect of a Decrease in Import Prices on Overall