If the U.S. government imposes a quota on toy imports, then
A)net capital outflow rises.
B)net exports rise.
C)the exchange rate rises.
D)All of the above are correct.

Name: If the U.S. government imposes a quota on toy imports, then A)net capital outflow rises. B)net exports rise. C)the exchange rate rises. D)All of the above are correct.
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Question

Quizplus · Accepted Answer

A quota on toy imports reduces the supply of foreign currency, leading to an appreciation of the domestic currency, hence the exchange rate rises.

If the US Government Imposes a Quota on Toy Imports, Then