Other things equal, if a change in the tastes of American consumers causes them to purchase more foreign goods at each level of

Question

3 years ago

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Other things equal, if a change in the tastes of American consumers causes them to purchase more foreign goods at each level of

U.S. GDP, then: A. unemployment will decrease domestically. B. U.S. real GDP will fall. C. inflation will occur domestically. U.S. real GDP will rise.

Business

1 answer:

mafiozo [28] · Answer 1 · 2022-06-07T00:38:10+03:00

Answer:

B. U.S. real GDP will fall

Explanation:

United States´s real Gross Domestic Product ( <em>GDP</em> ) will fall, because having American consumers preferring foreign goods instead of locally produced articles, the expected consequence is a reduction in the volume of local manufacturing. This fall will affect negatively the GDP index, as domestic production decreases.