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Strict quota on goods imported from japan

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Reference no: EM132626875

Assume that China places a strict quota on goods imported from Japan and that Japan does not retaliate. Holding other factors constant, this event should immediately decrease the chinese demand for Japanese goods (i.e. decrease in the Chinese imports from Japan); consequently, China BOT (balance of trade) deficit will:

a. become smaller (decrease in deficit amount)

b. become larger (larger deficit)

Reference no: EM132626875

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