In an open economy, as the price level increases, a(n) ____ in demand in the quantity of 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

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

Quizplus · Accepted Answer

In an open economy, an increase in the price level leads to a decrease in demand for domestic goods due to increased imports. As a result, the quantity of RGDP demanded also decreases.

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