The "Buy American" provision in the 2009 stimulus package would require that stimulus money be spent only on U.S.-made goods.In the market for steel,the "Buy American" provision would ________ the price of steel in the United States and ________ the quantity of steel demanded in the United States.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

The "Buy American" provision would increase the price of steel in the United States because it limits competition by excluding foreign steel, leading to higher prices. The quantity of steel demanded would decrease as a result of the higher prices.

The "Buy American" Provision in the 2009 Stimulus Package Would