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Ceteris paribus, a decrease in the U.S. price level will cause an increase in U.S. exports....

Ceteris paribus, a decrease in the U.S. price level will cause

an increase in U.S. exports.

an increase in U.S. imports.

the aggregate demand curve to shift to the left.
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Answer #1

Soln. Considering other economic parameters constant, a decrease in the US price level leads to the price reduction for the domestic good to other countries and leads to the increase in the relative price of goods that are imported in the countries from other countries. Over all, decrease in export price leads to increase in exports to other countries and increase in import price, leads to decrease in import items. Hence, option a (an increase in U.S. exports), is correct option.

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