Figure 32-5 Refer to the Following Diagram of the Open-Economy Macroeconomic Model

Multiple Choice

Figure 32-5
Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow.
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Graph (a)
Graph (b) Graph (c)
-Refer to Figure 32-5. If the interest rate were initially at r₂ and an import quota were imposed, the interest rate would

A) stay at r₂.
B) decrease because supply would shift right.
C) increase because supply would shift left.
D) decrease because demand would shift left.