Other things being equal,when the domestic price level rises exogenously,
A)Canadian goods become more expensive relative to foreign goods.
B)the net export function shifts upward.
C)the aggregate expenditure function shifts upward.
D)imports of foreign goods fall.
E)the desired investment function shifts upward.

Question

Quizplus · Accepted Answer

When the domestic price level rises exogenously, the prices of Canadian goods increase compared to foreign goods, making them less attractive to foreign buyers. This leads to a decrease in exports and an increase in imports, which can negatively impact the economy.

Other Things Being Equal,when the Domestic Price Level Rises Exogenously