If the United States is trading with Italy and the United States has high inflation while Italy does not,the prices of American goods in Italy will climb.

Question

Quizplus · Accepted Answer

If the United States has high inflation, the prices of American goods will become relatively more expensive compared to the lower inflation rates of other countries. Therefore, American goods will become more expensive for Italian consumers who may seek cheaper alternatives from other countries or domestically produced products. Hence, the prices of American goods in Italy will climb.

If the United States Is Trading with Italy and the United