If the Canadian government imposes an import quota on French wine, which of the following best predicts the consequences?
A) Canadian net exports will increase, the real exchange rate will appreciate, and domestic sales of Canadian wine will increase.
B) Canadian net exports will not change, the real exchange rate will appreciate, and domestic sales of Canadian wine will increase.
C) Canadian net exports will not change, the real exchange rate will depreciate, and domestic sales of Canadian wine will not change.
D) Canadian net exports will not change, the real exchange rate will appreciate, and domestic sales of Canadian wine will decrease.
Correct Answer:
Verified
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