Suppose Canada Imposes an Import Quota on Steel

question 78

Multiple Choice

Suppose Canada imposes an import quota on steel. Which of the following describes the most likely effects of this quota?

• A)Canadian exports would increase, the real exchange rate of the Canadian dollar would appreciate, and Canadian net capital outflow would increase.
• B)Canadian exports would increase, the real exchange rate of the Canadian dollar would depreciate, and Canadian net capital outflow would remain unchanged.
• C)Canadian exports would decrease, the real exchange rate of the Canadian dollar would appreciate, and Canadian net capital outflow would remain unchanged.
• D)Canadian exports would decrease, the real exchange rate of the Canadian dollar would depreciate, and Canadian net capital outflow would decrease.

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Definitions:

Manufacturing Overhead

The indirect costs of production, such as utilities and maintenance, that are not directly tied to specific products.

Units Produced

The total number of units of product completed by a manufacturing process in a specific period.

Manufacturing Overhead

Indirect costs associated with manufacturing, including utilities, depreciation, and salaries of non-direct labor, that are not directly traceable to specific units of product.

Units Produced

The total number of complete products that a manufacturing facility has finished producing during a specified period.