An import quota: a. increases the amount of a good imported, thus decreasing prices. b. limits the amount of a good that can be imported, thus decreasing prices. c. is the same as a ban on imports. d. increases the amount of a good imported, thus increasing prices. e. limits the amount of a good that can be imported, thus increasing prices.

Question

Business

Regan Chen

6 October, 11:31

An import quota: a. increases the amount of a good imported, thus decreasing prices. b. limits the amount of a good that can be imported, thus decreasing prices. c. is the same as a ban on imports. d. increases the amount of a good imported, thus increasing prices. e. limits the amount of a good that can be imported, thus increasing prices.

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Answers (1)

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Caylee Huber · Answer 1

Option (e) is correct.

Explanation:

An import quota is defined as the trade restriction on the goods imported from the other countries. It is implemented on the quantity of goods imported. Hence, this will increase the price of the goods imported. Import quota is normally implemented to protect the domestic producers of the country. It limits the physical quantity of the goods imported. For example; India limits the import of cars from Japan to $2 million per year.