Question 1
The United States and North Korea don't trade with each other. A decrease in the price level in North Korea
◦ increases the price level in the United States.
◦ decreases the price level in the United States.
◦ at first decreases the price level in the United States, then eventually increases it.
◦ does not affect the price level in the United States.
Question 2
When economic activity abroad is decreasing
◦ U.S. exports tend to decrease.
◦ U.S. exports tend to increase.
◦ the U.S. inflation rate tends to fall.
◦ the U.S. inflation rate tends to rise.