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. Suppose that initially the economy is in equilibrium at r₁ (point d) and e₃ (point i) . If the government removes import quotas, the exchange rate will move to

A) e₅.
B) e₄.
C) e₂.
D) e₁.