Business, 05.05.2020 17:43, emilyphillips1681

As the price level falls, the purchasing power of households' real wealth will (remain the same, rise, fall) , causing the quantity of output demanded to (rise, fall, remain the same) . This phenomenon is known as the (exchange rate, interest rate, wealth) effect.
Additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to (rise, fall) in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will, therefore, (rise, fall, remain the same), and the number of foreign products purchased by domestic consumers and firms (imports) will ___. Net exports will therefore (rise, fall, remain the same) , causing the quantity of domestic output demanded to (rise, fall, remain the same) . This phenomenon is known as the (exchange rate, interest rate, wealth) effect.

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As the price level falls, the purchasing power of households' real wealth will (remain the same, ris...