If inflation in the United States is lower than inflation in other countries,what will be the effect on net exports for the United States?
A)Net exports will rise as U.S.exports increase.
B)Net exports will rise as U.S.imports increase.
C)Net exports will decrease as U.S.exports decrease.
D)Net exports will decrease as U.S.imports decrease.

Question

Quizplus · Accepted Answer

Lower inflation in the United States would make U.S. goods relatively cheaper compared to other countries, leading to an increase in U.S. exports and thus increasing net exports.

If Inflation in the United States Is Lower Than Inflation