Government trade policies that restrict imports into a country tend to ____ the supply of the country's currency in the foreign exchange market and tend to ____ the value of the country's currency with respect to other currencies.

Question

Quizplus · Accepted Answer

Government trade policies that restrict imports into a country will reduce the supply of the country's currency in the foreign exchange market as there will be less currency needed to complete international transactions. This reduction in supply will lead to an increase in the value of the country's currency with respect to other currencies. Therefore, the correct option is D: decrease; increase.

Government Trade Policies That Restrict Imports into a Country Tend