Question: Which of the following describes why a price level decrease will cause net exports to increase? Group of answer choices Interest rates fall, decreasing foreign
Which of the following describes why a price level decrease will cause net exports to increase?
Group of answer choices
Interest rates fall, decreasing foreign investment in domestic bonds, decreasing demand for domestic currency and therefore depreciating the exchange rate.
Lower price levels cause a large increase in immigrants, increasing production and therefore the number of goods a country exports.
Interest rates rise, increasing foreign investment in domestic bonds and therefore causing the exchange rate to appreciate.
The government cuts back on government spending, leading firms to be less government dependent, more innovative, and increasing the demand for these newly innovate domestic products.
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