How would an increase in the Canadian price level, other things constant, affect imports and exports?
A) It would decrease Canadian exports but leave Canadian imports unchanged.
B) It would increase Canadian exports but leave Canadian imports unchanged.
C) It would decrease Canadian exports and increase Canadian imports.
D) It would increase Canadian exports and decrease Canadian imports.

Question

How would an increase in the Canadian price level, other things constant, affect imports and exports?  
A) It would decrease Canadian exports but leave Canadian imports unchanged. 
B) It would increase Canadian exports but leave Canadian imports unchanged. 
C) It would decrease Canadian exports and increase Canadian imports. 
D) It would increase Canadian exports and decrease Canadian imports.

Quizplus · Accepted Answer

An increase in the Canadian price level would make Canadian goods more expensive relative to foreign goods, thereby decreasing demand for Canadian exports and increasing demand for foreign imports. Therefore, Canadian exports would decrease and Canadian imports would increase.

How Would an Increase in the Canadian Price Level, Other