Other things equal, when the U.S. aggregate price level falls, U.S. exports _____ and U.S. imports _____.
A) fall; rise
B) fall; fall
C) rise; fall
D) rise; rise

Question

Quizplus · Accepted Answer

When the U.S. aggregate price level falls, U.S. goods become cheaper relative to foreign goods. This makes U.S. exports more attractive to foreigners, so exports rise. Simultaneously, foreign goods become relatively more expensive for U.S. consumers, leading to a decrease in imports.

Other Things Equal, When the U