Question

If the price of U.S.-produced goods becomes relatively less expensive compared to foreign-produced goods, ____________ increase(s).

Answer 1

If the price of U.S.-produced goods becomes relatively less expensive compared to foreign-produced goods, net export increases.

Aggregate demand increases while the additives of combination call for–along with intake spending, investment spending, government spending, and spending on exports minus imports upward thrust.

A second cause the mixture call for curve slopes downward lies inside the courting among hobby prices and investment. A decreased price level lowers the call for cash because much less money is required to buy a given amount of goods.

As the home price degree rises, foreign‐made items end up pretty inexpensive in order that the call for for imports will increase. But, the upward thrust within the domestic fee degree additionally approaches that domestic‐made goods are extraordinarily greater expensive to overseas shoppers in order that the demand for exports decreases.

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