When the price level in the Oman rises, then net exports should Select one: a. fall and equilibrium real CDP should decrease. b. rise and equilibrium real CDP should increase. c. fall and equilibrium real CDP should increase. d. rise and equilibrium real CDP should decrease.

When the price level in the Oman rises, then net exports should Select one: a. fall and equilibrium real CDP should decrease. b. rise and equilibrium real CDP should increase. c. fall and equilibrium real CDP should increase. d. rise and equilibrium real CDP should decrease.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: An Introduction To Basic Macroeconomic Markets

Section: Chapter Questions

Problem 13CQ

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Question

When the price level in the Oman rises, then net exports should
Select one:
a. fall and equilibrium real CDP should decrease.
b. rise and equilibrium real CDP should increase.
c. fall and equilibrium real CDP should increase.
d. rise and equilibrium real CDP should decrease.

Expert Solution

Step 1

When the price level increases, the goods in Oman become relatively expensive and goods abroad become relatively cheaper.

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