An increase in the U.S.price level relative to the price level of other countries would
A)increase U.S.net exports and increase aggregate demand.
B)increase U.S.net exports and increase aggregate supply.
C)reduce U.S.net exports and reduce aggregate demand.
D)reduce U.S.net exports and increase aggregate demand.

Question

Quizplus · Accepted Answer

An increase in U.S. price level relative to other countries would make U.S. goods more expensive, making them less competitive internationally. This would lead to a reduction in U.S. net exports, as well as a reduction in aggregate demand due to the decrease in exports.

An Increase in the U