When the average price level in the united states, relative to the average price levels in other countries, rises, this tends to raise imports and lower exports?

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Business

Miya

14 September, 12:51

When the average price level in the united states, relative to the average price levels in other countries, rises, this tends to raise imports and lower exports?

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Amara Owen · Answer 1

When the average price level rise in the USA relative the to the average price levels in other countries, American products become more expensive for those countries. Hence, there will a fall in imports level. On the other hand, countries with Lowe prices should experience a rise in the price exports because their products are more price-competitive.