In 2011, analysts were predicting increases in the aggregate price level in India. This would affect exports from India in that in would trigger a decrease in it's exports.
What is aggregate price level?
The aggregate price level is an indicator of the economy's total price level.
Economists analyze the cost of acquiring a market basket to determine the aggregate price level.
A price index is the ratio of a market basket's current cost to its cost in a base year multiplied by 100.
What effect does the price level have on exports?
Lower prices make a country's commodities more appealing to overseas customers, increasing exports.
It will also make foreign-produced products and services less appealing to customers in the economy, lowering imports. As a result, net exports grow.
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