you have just been hired by the u.s. government to analyze the following scenario. suppose the u.s. automobile industry is concerned about foreign car producers exporting their goods to the united states, a practice that hurts domestic producers. lobbyist claim that implementing a quota on imports would shrink the size of the trade deficit. the following exercise will help you to analyze this claim. the following graph shows the demand and supply of u.s. dollars in a model of the foreign-currency exchange market. shift the demand curve, the supply curve, or both to show what would happen if the government decided to implement the quota.

Supply O- Demand O- Supply REAL EXCHANGE RATE (Units of foreign currency per dollar) Demand QUANTITY OF DOLLARS Given this change, the dollar Fill in the following table with the effect of a quota on the following items: Supply of Loanable Funds Real Interest Rate National Saving Net Exports Change due to a quota