The open economy effect suggests that
A) a decrease in domestic price level will cause foreign residents to buy more domestic goods, increasing net exports.
B) a rise in domestic price level will cause domestic residents to buy fewer imported goods.
C) a rise in domestic price level will cause foreign residents to buy more domestic goods.
D) a decrease in domestic price level will cause foreign residents to buy fewer domestic goods, increasing net exports.
Question 2
The ________ plots the relationship between prices and the quantity that buyers are willing to purchase.
A) supply curve B) isoquant C) indifference curve D) demand curve
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