If the rate of inflation in the U.S.falls relative to the rate of inflation in foreign nations,U.S.exports _______ and imports ______.

Question

Quizplus · Accepted Answer

When inflation in the United States falls relative to inflation in foreign countries, the value of the dollar falls. This makes US exports cheaper for foreign buyers, leading to an increase in exports. At the same time, imports become more expensive for US consumers, leading to a decrease in imports. Therefore, the correct answer is A) increase; decrease.

If the Rate of Inflation in the U