Foreign Producers Typically Agree to Voluntary Export Restrictions Because

question 77

Multiple Choice

Foreign producers typically agree to voluntary export restrictions because

• A) their manufacturing capacity is limited.
• B) they can divert their exports to other countries and charge more for their products.
• C) they fear far more damaging punitive tariffs or import quotas might follow if they do not.
• D) they are required to by the World Trade Organization.

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Definitions:

Rational Expectations

The hypothesis that individuals form forecasts of future events based on past and current information in a consistent and unbiased manner.

Discretionary Policy

Refers to economic strategies and actions, such as changes in tax rates or government spending, opted by the government to manage the economy.

Passive Approach

An investment strategy that involves minimal buying and selling actions, typically focused on long-term investment in index funds and other diversified holdings.

Expansionary Monetary Policy

A policy by central banks to increase the money supply and decrease interest rates to stimulate economic growth.