According to the net exports effect, along a given AD curve the average price level is _____ related to net exports.
A) inversely
B) directly
C) unpredictably
D) not

Question

Quizplus · Accepted Answer

The net exports effect states that as the average price level in a country decreases, its net exports tend to increase (since its goods and services become cheaper relative to foreign goods and services), and vice versa. This implies an inverse relationship between the average price level and net exports.

According to the Net Exports Effect, Along a Given AD