Imposing an Import Quota Causes the Domestic Real Exchange Rate

question 32

Multiple Choice

Imposing an import quota causes the domestic real exchange rate to

• A)appreciate,which increases foreign demand for domestic goods.
• B)appreciate,which decreases foreign demand for domestic goods.
• C)depreciate,which increases foreign demand for domestic goods.
• D)depreciate,which decreases foreign demand for domestic goods.

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Definitions:

Satisfice

A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution.

Cost-benefit Relationship

An analysis or assessment that compares the costs and benefits of a decision, project, or action to determine its feasibility or worth.

Least Expensive

The option or solution with the lowest cost among a selection of alternatives.

Edisonian Method

A trial-and-error approach to innovation and problem-solving, inspired by Thomas Edison's experimental practices.