When the price level in France increases while the exchange rate and the price level in the United States remain the same, the result is
A) French citizens are more likely to buy U.S.- made goods.
B) U.S. citizens are less likely to buy French- made goods.
C) U.S.- made goods become relatively cheaper compared to French- made goods.
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

When the price level in France increases, French goods become more expensive relative to U.S. goods, leading French citizens to buy more U.S.-made goods (A), U.S. citizens to buy fewer French-made goods (B), and U.S.-made goods to become relatively cheaper (C).

When the Price Level in France Increases While the Exchange