Question

In an open economy, as the price level increases, a(n) ____ in demand in the quantity of domestic goods results in a(n) ____ in the quantity of GDP demanded.
a. ​ decrease, decrease
b. ​ increase, increase
c. ​ decrease, increase
d. ​ increase, decrease

Answer 1

Answer:

a. ​ decrease, decrease 

Explanation:

When prices increase, domestic goods becomes more expensive and the quantity of domestic goods demanded falls and export falls.

Therefore, because of the decease in quantity of domestic goods demanded, the quantity of GDP demanded falls.

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