Reducing an Import Quota Lowers Import Volumes

Steps:

• A quota sets a maximum quantity of a good that can be imported.
• Reducing the quota size decreases this maximum allowed import amount.
• With a stricter limit, importers bring in fewer units of the good.
• This directly results in lower overall imports from China.

Why D is correct:

• By definition, an import quota restricts the quantity of goods entering the country; shrinking it enforces a smaller import volume.

Why the others are wrong:

• A: Reduced supply from fewer imports likely raises the good's price in the US, not lowers it.
• B: Fewer imports improve the US balance of trade by reducing the trade deficit.
• C: Quotas generate revenue only if licenses are sold, but reduction doesn't inherently decline government income.

Final answer: D