When the price level in Canada rises relative to the price level of other countries, ________ will rise, ________ will fall, and ________ will fall.
A)imports; exports; net exports
B)exports; imports; net exports
C)net exports; exports; imports
D)net exports; imports; exports
E)exports; net exports; imports

Question

Quizplus · Accepted Answer

When the price level in Canada rises relative to other countries, Canadian goods become more expensive to foreigners, leading to a decrease in exports. Conversely, foreign goods become relatively cheaper to Canadians, increasing imports. As a result, net exports (exports minus imports) will fall.

When the Price Level in Canada Rises Relative to the Price