The Foreign Purchases Effect Suggests That an Increase in the U.S

Multiple Choice

The foreign purchases effect suggests that an increase in the U.S. price level relative to other countries will

A) increase the amount of U.S. real output purchased.
B) increase U.S. imports and decrease U.S. exports.
C) increase both U.S. imports and U.S. exports.
D) decrease both U.S. imports and U.S. exports.