In an open economy,when the domestic price level rises,Canadian consumers want to
A)buy more domestic goods.
B)buy cheaper-priced foreign goods.
C)increase trade tariffs.
D)decrease imports.

Question

Quizplus · Accepted Answer

When the domestic price level rises, domestic goods become relatively more expensive compared to foreign goods. As a result, Canadian consumers would prefer to buy cheaper-priced foreign goods. This would lead to an increase in imports and a decrease in demand for domestic goods.

In an Open Economy,when the Domestic Price Level Rises,Canadian Consumers