If the Canadian government imposes an import quota on French wine,which of the following best predicts the consequences?
A)Both Canadian net exports and domestic sales of Canadian wine will increase.
B)Canadian net exports will not change, and domestic sales of Canadian wine will increase.
C)Both Canadian net exports and domestic sales of Canadian wine will decrease.
D)Canadian net exports will not change, and domestic sales of Canadian wine will decrease.

Question

Quizplus · Accepted Answer

An import quota on French wine would likely lead to an increase in domestic sales of Canadian wine as consumers substitute domestic wine for the restricted imports. Canadian net exports would not change as the quota affects imports, not exports.

If the Canadian Government Imposes an Import Quota on French