When the price level is low, resulting in domestic goods being cheaper than imported foreign goods,
A) consumers hold more money.
B) consumers spend less.
C) the demand for domestic goods will increase.
D) there will be a reduction in import tariffs.

Question

Quizplus · Accepted Answer

When the price level is low, domestic goods become cheaper than imported foreign goods, which makes domestic goods more attractive to consumers. This will lead to an increase in demand for domestic goods. Therefore, the correct answer is C. None of the other options are directly related to the scenario described.

When the Price Level Is Low, Resulting in Domestic Goods