Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A → B → C → D
B
B → A → C → D
C
A → C → B → D
D
D → C → A → B
Understanding the Answer
Let's break down why this is correct
Answer
To understand how rising inflation affects international trade, we start with higher inflation increasing domestic prices of goods. When prices go up, foreign buyers notice that the cost of our products is higher than before. As a result, they may decide to buy less from us because the goods are now too expensive. This leads to a decrease in export levels, meaning we sell fewer products to other countries. Finally, as exports drop, trade patterns shift since countries will look for cheaper alternatives elsewhere.
Detailed Explanation
When inflation rises, prices at home go up first. Other options are incorrect because This option suggests buyers react before prices rise; This option skips the step where buyers react to higher prices.
Key Concepts
Inflation and its impact on prices
International trade dynamics
Export levels
Topic
Inflation and Trade Effects
Difficulty
easy level question
Cognitive Level
understand
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