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Use the Figure Below to Answer the Following Questions

Question 158

Multiple Choice

Use the figure below to answer the following questions.
Figure 32-2 Use the figure below to answer the following questions. Figure 32-2 -Refer to Figure 32-2. If the economy were initially in equilibrium at r<sub>0 </sub>and E<sub>0</sub> and the government removed import quotas, what would happen to the exchange rate? A) It would appreciate to E<sub>1</sub>. B) It would appreciate to E<sub>2</sub>. C) It would depreciate to E<sub>1</sub>. D) It would depreciate to E<sub>2</sub>.
-Refer to Figure 32-2. If the economy were initially in equilibrium at r0 and E0 and the government removed import quotas, what would happen to the exchange rate?


A) It would appreciate to E1.
B) It would appreciate to E2.
C) It would depreciate to E1.
D) It would depreciate to E2.

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