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If the rate of inflation in the U.S. falls relative to the rate of inflation in foreign nations, the U.S. exports increase, and imports decrease. Therefore, the option A holds true.
Inflation can be referred to or considered as the condition where the rates of commodities in an economy increase. When the inflation level rises, the amount of exports in an economy are subject to decrease with an increase in its imports and vice versa.
Therefore, the option A holds true and states regarding the significance of inflation.
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The missing choices to the incomplete question have been added below for better reference.
If the rate of inflation in the U.S. falls relative to the rate of inflation in foreign nations, u.s. exports _____ and imports _____.
A. increase; decrease
B. Increase; increase
C. decrease; increase
D. decrease; decrease