If the price level increases, then

A. domestic goods are more expensive relative to foreign goods, which reduces total planed real expenditures.
B. foreign residents buy fewer U.S. goods, leaving more goods for U.S. residents and an increase in total planned real production by firms.
C. the exchange rate will increase, causing U.S. goods to become cheaper and increasing total planned real expenditures.
D. imports increase but exports do not change. Therefore, there is no effect on total planned real expenditures.


Answer: A

Economics

You might also like to view...

The New Deal was carried out during the administration of President

A. Herbert Hoover. B. Franklin Roosevelt. C. Harry Truman. D. Dwight Eisenhower.

Economics

If the value of the U.S. dollar changes from 1.2 euros to 1.4 euros, we would expect that the United States would experience a ________ in exports and a ________ in imports

A) rise; rise B) fall; fall C) rise; fall D) fall; rise

Economics

Which of the following questions is addressed primarily by macroeconomics? a. The allocation of scarce satellite orbit slots

b. Decisions made by a manufacturer of a particular good. c. Policies to control the inflation rate. d. A consumer's decision to buy more clothing and less food.

Economics

If the United States can produce computers efficiently, then what is the most likely reason it imports computers from other countries?

a. Producing computers would take resources from the production of other goods in which the United States has a comparative advantage. b. Computers manufactured in other countries are of higher quality and are more durable than computers made in the United States. c. International law requires computer manufacturing to take place in the country of origin of the computer firms. d. Other countries have an absolute advantage over the United States when it comes to computer manufacturing.

Economics