00:09
So for the first one, import restrictions will lead to a decrease in output in country a because its access to the foreign market is limited.
00:37
Reducing exports to country b will result in reduced production levels.
00:43
It can potentially lower employment in industries that rely on these exports.
01:44
The real exchange rate in a will appreciate.
01:47
This is because by restricting imports from a, b will reduce supply of country b's currency in the foreign exchange market.
02:35
The real exchange rate, therefore, will increase.
02:46
Countries a's exports will decrease because of import restrictions.
03:21
Level of exports will decline.
03:29
Imports from country b will also decrease because the legislation will affect imports.
03:42
Exports will decline more than imports.
04:02
Net exports is exports minus imports, so net exports will also go down.
04:22
Allowing the price level to adjust will affect our answer in part a.
04:31
The impact on output and real exchange rate may be mitigated...