Reducing an Import Quota Lowers Import Volume

Steps:

• A quota limits the quantity of a good that can be imported.
• Reducing the quota size decreases the maximum allowable imports from China.
• With fewer units permitted, actual imports fall.
• This directly reduces the volume of the good entering the US.

Why D is correct:

• By definition, an import quota restricts quantity; shrinking it enforces less importation to stay within the new limit.

Why the others are wrong:

• A: Quotas typically raise prices by limiting supply, so the good becomes more expensive.
• B: Less imports improve the trade balance by reducing the deficit.
• C: Quotas generate no direct revenue; tariffs do—quotas affect quantity, not government income.

Final answer: D