Imports have the potential to lower a country's inflation rate. In particular, imports of HIGHER-priced goods and services place a limit on what domestic competitors charge for comparable goods and services.

Question

Quizplus · Accepted Answer

Imports, especially of lower-priced goods and services, can help lower a country's inflation rate by providing cheaper alternatives to domestic products, thus increasing competition and potentially driving down prices. Higher-priced imports would not typically contribute to lowering inflation.

Imports Have the Potential to Lower a Country's Inflation Rate