Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 14

Suppose Japan agreed to a voluntary export restriction (VER) that reduced U.S. imports of Japanese steel by 10 percent. What would be the likely short-run effects of that VER on the U.S. and Japanese steel industries If this restriction were permanent, what would be its long-run effects in the two nations on ( a ) the allocation of resources, ( b ) the volume of employment, ( c ) the price level, and ( d ) the standard of living