As the U.S.price level rises relative to price levels in other countries,U.S._____.
A)consumption and net exports will both decrease
B)consumption and net exports will both increase
C)consumption would increase and net exports will decrease
D)consumption would decrease and net exports will increase
E)consumption and net exports will remain constant

Question

Quizplus · Accepted Answer

When the U.S. price level rises relative to other countries, U.S. goods become more expensive to both U.S. consumers and foreign buyers. This leads to a decrease in consumption (as consumers may seek cheaper alternatives) and a decrease in net exports (as U.S. exports become less competitive internationally).

As the USPrice Level Rises Relative to Price Levels in Other Countries,U