ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -At the request of the United States Government, effective as of April 1, 1981, the Japanese began voluntarily restraining exports of automobiles to the United States to provide the U.S. automobiles industry with a period of time to make the necessary adjustment to become more competitive with imports.

Detailed explanation-2: -Over this period the restraints (in essence, quotas) caused the prices of Japanese cars sold in the United States to average about $1, 200 higher (in 1983 dollars), some 14 percent above what they would have been without the restraints.

Detailed explanation-3: -Beginning in 1981, the Japa-nese agreed to voluntary export restraints on their automobile imports to the U.S. market. Initially, the program allowed just 1.68 million Japanese automobiles into the United States each year.

Detailed explanation-4: -In 1981, under pressure from the Reagan administration, Japan agreed to limit the number of cars it sold to the U.S., known as a voluntary export restraint (VER).