Other things the same, an increase in the price level induces less spending on a. investment and net exports. b. inv...

Question

Question

Other things the same, an increase in the price level induces less spending on

a. investment and net exports.

b. investment, but not net exports.

c. net exports, but not investment.

d. neither net exports nor investment.

business economics

Answer 1

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Answer #1

Answer

Option b

a. investment and net exports.

The increase in the price level makes import affordable so the import increases and export decreases.

The investments spending decreases as the durable good and investment will be postponed

Answer 2

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