In an open economy, as the price level increases, a(n) ____ in demand for domestic goods results in a(n) ____ in the quantity of RGDP demanded.
A)increase, decrease
B)increase, increase
C)decrease, decrease
D)decrease, increase

Question

Quizplus · Accepted Answer

As the price level increases, domestic goods become more expensive relative to foreign goods, leading to a decrease in demand for domestic goods and a decrease in the quantity of real GDP demanded.

In an Open Economy, as the Price Level Increases, A(n)