The imposition of an import quota shifts
A)the supply of currency right,so the exchange rate falls.
B)the supply of currency left,so the exchange rate rises.
C)the demand for currency right,so the exchange rate rises.
D)the demand for currency left,so the exchange rate falls.

Question

Quizplus · Accepted Answer

An import quota reduces the quantity of goods that can be imported, leading to a decrease in the supply of foreign currency and an increase in the demand for domestic currency, causing the exchange rate to rise.

The Imposition of an Import Quota Shifts