Which of the following would occur as a result if Europe experienced a lower inf

ID: 2439736 • Letter: W

Question

Which of the following would occur as a result if Europe experienced a lower inflation rate than the U.S.?

European products would become more expensive to U.S. consumers.

It would decrease the quantity of European goods demanded by Americans.

It would decrease the demand for Euros.

None of the above would occur.

European products would become more expensive to U.S. consumers.

It would decrease the quantity of European goods demanded by Americans.

It would decrease the demand for Euros.

None of the above would occur.

The correct answer is: d)

Reason: option a) is incorrect as the European products would actually become cheaper

Option b) is incorrect as it would increase the quantity of European goods demanded by Americans.

Option c) is incorrect as it would increase the demand for Euros.

Thanks!

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