Suppose the U

Question

Suppose the U

Examlex · Accepted Answer

The Answer is Nothing will happen to the U.S.current account deficit,unless the import restrictions cause a change in savings or investment behavior.Absent these changes,which are unlikely,reduced U.S.imports of Japanese cars will lower the U.S.demand for yen,which will lead to a rise in the dollar's value.The appreciating dollar will make U.S.exports less competitive and other foreign imports more attractive.The net result is that a reduction in U.S.imports of Japanese cars is balanced by reduced U.S.exports of goods and services and increased U.S.non-steel imports.

Suppose the U

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