In response to an import quota
A)exports increase by more than imports.
B)imports increase by more than exports.
C)imports and exports are unaffected, but the government collects revenues.
D)imports and exports are both reduced, but net exports are unchanged.

Question

Quizplus · Accepted Answer

An import quota reduces the amount of imported goods allowed into a country. This causes a decrease in imports, but it also has an impact on exports because the exporting country will be selling fewer goods to the importing country. Therefore, both imports and exports are reduced, but the net exports (exports minus imports) are unchanged. This is because the reduction in imports is offset by the reduction in exports.

In Response to an Import Quota