The Open Economy Effect Suggests That

Multiple Choice

The open economy effect suggests that

A) a decrease in domestic price level will cause foreign residents to buy fewer domestic goods, increasing net exports.
B) a decrease in domestic price level will cause foreign residents to buy more domestic goods, increasing net exports.
C) a rise in domestic price level will cause foreign residents to buy more domestic goods.
D) a rise in domestic price level will cause domestic residents to buy fewer imported goods.