If a country removed an import quota on cotton, then overall that country's Group of answer...
If a country removed an import quota on cotton, then overall that country's
Group of answer choices
exports and imports would rise.
exports and imports would fall.
exports would fall and imports would rise.
exports would rise and imports would fall.
Homework Answers
Option (1).
An import quota restricts imports, by raising domestic price which decreases domestic demand (QD) and increases domestic supply (QS). When the quota is removed, domestic price decreases, so QD increases and QS decreases, increasing imports (= QD - QS). However, at lower domestic price, foreign demand for domestically produced cotton will increase, which will also increase the export of cotton.
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If a country removed an import quota on cotton, then overall
that country's
Group of answer...
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Answer A is wrong.
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Answer A is wrong.
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17 18
QUESTION 17 Suppose a country's central bank announces that it is decreasing the long-run money growth rate to tame inflation. The country's currency will suddenly and its rate of depreciation will then O appreciate; rise O depreciate; rise appreciate; fall O depreciate; fall QUESTION 18 A balance of payments crisis is OA a sharp change in interest rates sparked by a change in expectations about the level of exports. ов. a sharp change in foreign reserves sparked by...
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