[This is part of the series:Â The Complete Guide To Economics 101.]
What is the international effect?
The International Effect is the impact that a decreasing price level will have on exports.
Basically, as the overall price level falls, our goods become cheaper to other nations, and their goods become more expensive to us.
As a result, exports should increase, and imports should decrease.
This cause and effect, of course, assumes no changes in exchange rates.