The Exchange-Rate Effect Is Based,in Part,on the Idea That

Multiple Choice

The exchange-rate effect is based,in part,on the idea that

A) a decrease in the price level reduces the interest rate.
B) an increase in the price level causes investors to move some of their funds overseas.
C) an increase in the price level causes domestic goods to become less expensive relative to foreign goods.
D) a decrease in the price level reduces spending on net exports.