If the U.S.imposed import quotas on cotton,then which of the following would rise?
A)the U.S.real exchange rate and U.S.net exports
B)the U.S.real exchange rate but not U.S.net exports
C)U.S.net exports but not the U.S.real exchange rate
D)neither the U.S.real exchange rate nor U.S.net exports

Question

Quizplus · Accepted Answer

Import quotas would increase the U.S. real exchange rate by making domestic goods relatively more expensive, but they would not affect net exports because the quantity of exports is not directly influenced by import restrictions.

If the USImposed Import Quotas on Cotton,then Which of the Following Would