When the price level in Canada falls relative to the price level of other countries, ________ will fall, ________ will rise, and ________ will rise.
A)imports; exports; net exports
B)exports; imports; net exports
C)net exports; exports; imports
D)net exports; imports; exports
E)net exports; incomes; exports

Question

Quizplus · Accepted Answer

When the price level in Canada falls relative to other countries, Canadian goods become cheaper for foreigners, leading to an increase in exports. Conversely, foreign goods become relatively more expensive for Canadians, leading to a decrease in imports. As a result, net exports (exports minus imports) will rise.

When the Price Level in Canada Falls Relative to the Price