Asked by Gavin Laielli on May 05, 2024
Verified
Assume that a VER (voluntary export restraint) is imposed on an imported product. The difference between the domestic price and the world price is captured by
A) the government.
B) foreign exporters.
C) domestic consumers.
D) domestic workers.
VER (Voluntary Export Restraint)
An agreement by an exporting country to limit the quantity of goods exported to another country, often to avoid formal trade restrictions or tariffs.
Domestic Price
The price of goods or services within a country's borders, as opposed to the price of those goods or services in international markets.
World Price
World Price is the international market price of a good or service, determined by global supply and demand forces.
- Identify and classify various types of trade restrictions and their consequences.
Verified Answer
AC
Alexandra Claire JuanilloMay 09, 2024
Final Answer :
B
Explanation :
When a voluntary export restraint (VER) is imposed, the difference between the domestic price and the world price is often captured by foreign exporters, as they can sell their products at a higher price in the market imposing the VER.
Learning Objectives
- Identify and classify various types of trade restrictions and their consequences.