Question

The U.S. imposes a quota on imported Japanese cars. This will cause the (supply of) (/(demand for) American cars to (increase )/ (decrease) because _

Answer 1

Answer: demand for; increase

Explanation:

A quota is when there's a limit on the quantity of goods that a foreign country can bring into a particular country. This is done usually to protect the local industries in the home country and allow them grow as well.

When the U.S. imposes a quota on imported Japanese cars, this will lead to the reduction in the number of the cars brought into the country from Japan. Hence, this will lead to a demand for the cars produced in America and this will bring about an increase in the quantity demanded