If the price level in Canada increases,domestic goods will become relatively more expensive than foreign goods.Consumers will import more and reduce the quantity of domestic goods and services they buy.

Question

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When the price level in Canada increases, the domestic goods become relatively more expensive than foreign goods. This makes it more attractive for consumers to import goods from foreign countries. As a result, the quantity of domestic goods and services that consumers buy decreases.

If the Price Level in Canada Increases,domestic Goods Will Become