When the relative prices of Canadian-made goods go up,the result is
A)an increase in exports.
B)a decrease in exports.
C)a decrease in imports.
D)no net change in imports or exports.

Question

Quizplus · Accepted Answer

When the relative prices of Canadian-made goods go up, Canadian-made goods become relatively more expensive compared to goods made in other countries. This leads to a decrease in exports as foreign consumers are less likely to purchase the relatively more expensive Canadian-made goods.

When the Relative Prices of Canadian-Made Goods Go Up,the Result