Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate a voluntary export restraint agreement with Japan that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created" in the U.S. automobile industry.
Refer to Situation 32-1. Which of the following arguments is least likely to have been used by the U.S. auto industry to argue for import quotas?
A) If the quantity of low-priced import cars is not restricted, foreigners will overtake the U.S. car market.
B) A healthy auto industry is vital to our national security.
C) If import quotas are in place, our profits will increase by about $300 per vehicle.
D) Japan is protecting its market, and so should we; all we want is a level playing field.
Correct Answer:
Verified
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