Solved

When the Prices of a Country's Imports Decrease, the Prices

Question 172

Multiple Choice

When the prices of a country's imports decrease, the prices of domestic goods may decrease. This occurs because


A) a decrease in the prices of imported inputs will cause aggregate supply to decrease.
B) if import prices fall relative to domestic prices, households will tend to substitute domestically produced goods and services for imports.
C) if import prices fall relative to domestic prices, households will tend to substitute imports for domestically produced goods and services.
D) a decrease in the prices of imported inputs will cause aggregate demand to increase.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents