Other things equal, if a change in the tastes of American consumers causes them to purchase more foreign goods at each level of U.S. GDP, then
A) unemployment will decrease domestically.
B) U.S. real GDP will fall.
C) inﬂation will occur domestically.
D) U.S. real GDP will rise.

Question

Quizplus · Accepted Answer

If American consumers purchase more foreign goods, it means they are buying less domestically produced goods. This will lead to a decrease in domestic demand and a fall in U.S. real GDP.

Other Things Equal, If a Change in the Tastes of American