U.S.-imposed trade quotas would
A)increase neither net exports, nor net capital outflow.
B)increase net exports, but not net capital outflow.
C)increase net capital outflow, but not net exports.
D)increase net exports and net capital outflow.

Question

Quizplus · Accepted Answer

Trade quotas restrict the quantity of imports that can enter a country. This would decrease imports and increase domestic production, leading to an increase in exports. However, it would not necessarily affect the level of capital outflow. Therefore, the answer is A - trade quotas would increase neither net exports nor net capital outflow.

U.S.-Imposed Trade Quotas Would