An increase in the use of quotas is expected to: A) reduce the country’s current account...

An increase in the use of quotas is expected to:

A) reduce the country’s current account balance, if other governments do not retaliate.

B) increase the country’s current account balance, if other governments do not retaliate.

C) have no impact on the country’s current account balance unless other governments retaliate.

D) increase the volume of a country’s trade with other countries.

Expert Solution

Ans.

Here is correct answer is option (B)

That is

increase the country’s current account balance, if other governments do not retaliate.

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