Suppose the U.S.removes an Import Quota on Steel.U.S.exports

question 171

Multiple Choice

Suppose the U.S.removes an import quota on steel.U.S.exports

• A)increase,the real exchange rate of the U.S.dollar appreciates,and U.S.net capital outflow increases.
• B)increase,the real exchange rate of the U.S.dollar depreciates,and U.S.net capital outflow is unchanged.
• C)decrease,the real exchange rate of the U.S.dollar appreciates,and U.S.net capital outflow is unchanged.
• D)decrease,the real exchange rate of the U.S.dollar depreciates,and U.S.net capital outflow decreases.

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Definitions:

Nominal Interest Rate

The interest rate unadjusted for inflation, representing the face value rate at which money can be borrowed or saved.

Inflation Rate

A rise in the cost of goods and services in an economy, expressed as a percentage over a certain time frame.

Rate of Inflation

The Rate of Inflation signifies the percentage increase in the general price level of goods and services in an economy over a period of time, leading to a decrease in purchasing power.

Imported Goods

Products brought into one country from another for the purpose of sale.