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rhwyatt rhwyatt
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5 years ago
Suppose the United States experiences a long period of relatively stable prices while other countries experience long periods of inflation. How will this affect U.S. net exports?
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InMacro

InMacro


Edition: 1st
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5 years ago
If inflation in the United States is lower than inflation in other countries, then prices of products and services produced in the United States increase at a slower pace than the prices of products and services of other countries.  This difference in the price levels increases the demand for U.S. goods relative to foreign goods.  U.S. exports increase, imports decrease, and U.S. net exports rise.
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