Suppose the U.S.removes an import quota on steel.U.S.exports
A)increase,the real exchange rate of the U.S.dollar appreciates,and U.S.net capital outflow increases.
B)increase,the real exchange rate of the U.S.dollar depreciates,and U.S.net capital outflow is unchanged.
C)decrease,the real exchange rate of the U.S.dollar appreciates,and U.S.net capital outflow is unchanged.
D)decrease,the real exchange rate of the U.S.dollar depreciates,and U.S.net capital outflow decreases.

Question

Quizplus · Accepted Answer

Removing an import quota on steel would likely lead to an increase in imports, causing the real exchange rate of the U.S. dollar to depreciate. This depreciation makes U.S. goods cheaper for foreign buyers, potentially increasing exports. Net capital outflow remains unchanged as it is not directly affected by import quotas.

Suppose the U.S.removes an Import Quota on Steel.U.S.exports