Which of the Following Statements Is True About Voluntary Export

question 11

Multiple Choice

Which of the following statements is true about voluntary export restraints (VERs) ?

• A) VERs benefit consumers by limiting import competition.
• B) VER reduces the domestic price of an imported good.
• C) When imports are limited to a low percentage of the market by a VER, the price is bid up for that limited foreign supply.
• D) Foreign producers agree to VERs because they fear economic instability in the world economy.
• E) VERs negatively affect domestic producers by increasing import competition.