If Canada imposes a quota on imports of Japanese cars due to claims of "unfair" trade practices, and Japanese demand for Canadian exports increases at the same time, then, in the long run ________, everything else held constant.
A) the Japanese yen will appreciate relative to the Canadian dollar
B) the Japanese yen will depreciate relative to the Canadian dollar
C) the Japanese yen will either appreciate, depreciate or remain constant against the Canadian dollar
D) there will be no effect on the Japanese yen relative to the Canadian dollar
Correct Answer:
Verified
Q40: The theory of purchasing power parity cannot
Q42: Anything that increases the demand for foreign
Q42: If, in retaliation for "unfair" trade practices,
Q49: The theory of asset demand suggests that
Q49: One way to understand the short-run behaviour
Q51: An increase in productivity in a country
Q52: Everything else held constant,if a factor increases
Q52: Explain how trade barriers affect the exchange
Q53: The _ suggests that the most important
Q58: Lower tariffs and quotas cause a country's
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents