Chapter 8R, Problem 24MCQ

To determine

To find:

Impact of import quota.

Explanation of Solution

Import quotas, which are typically enforced to safeguard domestic industries and vulnerable producers, may be defined as the fixing on the maximum quantity of any given product imported in that nation. It prevents domestic markets from being overrun by imported goods that are frequently less expensive than same or similar products made locally by players due to low production costs in the export market or high levels of efficiency, the exporter party's knowledge, etc. However, since they could not be acquiring items at a lower price, this import limitation may have an impact on consumer mood. increasing the domestic economy's overall price level.

Thus, from the above we can conclude that the correct option is E.