Question

If inflation in the United States is lower than inflation in other​ countries, then U.S. exports​ ________ and U.S. imports​ ________, which​ _________ net exports. A. ​increase; decrease; increases B. ​decrease; increase; decreases C. ​decrease; increase; increases D. ​increase; increase; decreases\

Answer 1

A. increase; decrease; increase

Step-by-step explanation:

If the inflation of United States is lower than in other countries, it means that the price level of United States products are relatively lower than price of products in other countries. So that, the foreign consumers want to buy U.S products more, leading to the increase in U.S. export.

Similarly, as the price of products in other countries are higher than that in the U.S., so that the U.S. residents want to buy domestic products more, reducing the imports of products from other countries, leading to the decrease in the U.S. import.

As the Net export = Export ↑- Imports↓

=> The Net export of US would increase