Which of the following statements is the MOST accurate?
A) In the long run, national price levels play a minor role in determining both interest rates and the relative prices at which countries' products are traded.
B) In the long run, national price levels play a key role only in determining interest rates.
C) In the long run, national price levels play a key role only in determining the relative prices at which countries' products are traded.
D) In the long run, national price levels play a key role in determining both interest rates and the relative prices at which countries' products are traded.
E) In the long run, national price levels play no role in determining interest rates and the relative prices at which countries' products are traded.

Question

Quizplus · Accepted Answer

In the long run, national price levels play a key role in determining both interest rates and the relative prices at which countries' products are traded. This is because inflation and the overall health of a country's economy impact both interest rates and the relative value of its currency in trade with other countries. Therefore, it is important to consider national price levels when making economic decisions on a national and international level.

Which of the Following Statements Is the MOST Accurate