A fall in the Canadian price level will cause foreigners to:
A) substitute Canadian goods for foreign goods.
B) substitute foreign goods for Canadian goods.
C) buy more foreign goods.
D) buy fewer Canadian goods.

Question

Quizplus · Accepted Answer

When the price level falls in Canada, Canadian goods become cheaper relative to foreign goods. This makes Canadian goods more attractive to foreigners, leading them to substitute Canadian goods for foreign goods.

A Fall in the Canadian Price Level Will Cause Foreigners