In 2002,the United States Imposed Restrictions on the Importation of Steel

question 47

Multiple Choice

In 2002,the United States imposed restrictions on the importation of steel into the United States.The open-economy macroeconomic model shows that such a policy would

• A)lower the real exchange rate and increase net exports.
• B)lower the real exchange rate and have no effect on net exports.
• C)raise the real exchange rate and decrease net exports.
• D)raise the real exchange rate and have no effect on net exports.

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Definitions:

Residual Income

The net income an investment or business venture generates above the minimum rate of return.

Minimum Required Rate

The lowest return rate that an investor or project manager would accept for an investment.

Residual Income

Income that remains after all costs and expenses, including minimum required return on investment, have been subtracted.

Operating Assets

Long-term assets used in the operations of a business, including property, plant, and equipment, that generate income.