What Is the International Trade Effect

Multiple Choice

What is the international trade effect?

A) It is the tendency for exports to fall and imports to rise when the domestic price level falls relative to the foreign price level.
B) It is the tendency for exports to rise and imports to fall when the domestic price level falls relative to the foreign price level.
C) It is the tendency for domestic investments to fall when foreign interest rates rise relative to domestic interest rates.
D) It is the tendency for exchange rates to fall when foreign interest rates rise relative to domestic interest rates.