Imports have the potential to lower a country's inflation rate because of each of the following EXCEPT:
A)the import of lower priced goods limits what domestic competitors can charge for goods.
B)the import of lower priced services limits what domestic competitors can charge for services.
C)the higher prices of foreign goods spurs domestic competitors to cut prices.
D)of all of the above

Question

Quizplus · Accepted Answer

The import of higher-priced foreign goods cannot lower a country's inflation rate as it will not limit domestic competitors' prices. Thus, option C is incorrect. The other options are correct as they highlight how imports can limit domestic prices and competition, ultimately lowering the inflation rate.

Imports Have the Potential to Lower a Country's Inflation Rate