Which of the following situations will arise in the domestic market following the imposition of a voluntary export restraint?

Question

Quizplus · Accepted Answer

When a voluntary export restraint is imposed, imports decrease as a result of the restriction on the production of goods in the exporting country. This reduction in imports results in an increase in domestic production which could potentially lead to an increase in prices due to the decrease in competition. Therefore, option A is the correct answer.

Which of the Following Situations Will Arise in the Domestic