In the 1980s, Japan agreed to limit the quantity of automobiles it would export to the United States. Why did the Japanese government agree to this trade restriction?

A) The Japanese government wanted more automobiles to be available for export to countries other than the United States.
B) The Japanese government feared that the alternative would be a tariff or quota on imports of Japanese automobiles imposed by the U.S. government.
C) The Japanese government wanted to limit sales to the United States in order to make more automobiles available for Japanese consumers.
D) Japanese automobile producers lobbied for the restrictions in order to increase the price of their exports to the United States.

B

Economics

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Wages in Baltonia are downwardly rigid. Which of the following will happen if a recession occurs in the country?

A) Employment will fall less than if wages were flexible. B) Unemployment will fall less than if wages were flexible. C) Employment will fall more than if wages were flexible. D) Unemployment will fall more than if wages were flexible.

Economics

Edgar Browning and William Johnson, in a paper published in the Journal of Political Economy (1984), presented evidence that a one-dollar transfer to the bottom 40 percent of income distribution costs the top 60 percent nine dollars. If correct, this finding proves

A. the tax system is generating significant excess burdens. B. these transfers are not worth the cost. C. loopholes have to be closed. D. the burden of the tax system is too great.

Economics