What impact will a decrease in the Canadian price level have?
A)It will decrease real GDP demanded in Canada.
B)It will decrease Canadian exports.
C)It will increase money demand in Canada.
D)It will decrease Canadian imports.

Question

Quizplus · Accepted Answer

A decrease in the Canadian price level will lead to Canadian goods becoming relatively cheaper and therefore more competitive. This would lead to an increase in Canadian exports as foreign buyers would prefer to purchase Canadian goods. This would also lead to a decrease in Canadian imports as Canadians would prefer to purchase domestic goods due to their relative affordability.

What Impact Will a Decrease in the Canadian Price Level