A fall in the relative prices of a country's exports tends to ________________ that country's net exports, and thereby, to ____ its real GDP.
A)increase; raise
B)decrease; raise
C)decrease; decrease
D)None of the above is correct.

Question

Quizplus · Accepted Answer

A fall in the relative prices of a country's exports makes them more competitive internationally, leading to an increase in demand for these exports, which can increase net exports and raise the country's real GDP.

A Fall in the Relative Prices of a Country's Exports