When a country imposes an import quota,its
A)imports fall and its net exports rise.
B)imports fall and its net exports are unchanged.
C)imports rise and its net exports are unchanged.
D)imports and exports are unchanged.

Question

Quizplus · Accepted Answer

An import quota is a restriction on the quantity of goods that can be imported into a country. This restriction causes the quantity of imports to decrease. Since net exports are the difference between exports and imports, a decrease in imports leads to an increase in net exports. Therefore, the correct answer is B - imports fall and net exports are unchanged.

When a Country Imposes an Import Quota,its