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

question 77

Multiple Choice

Figure 32-5
Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow.
​
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.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide the financial reporting process.

Double-Entry Accounting

An accounting method that involves making two entries for every transaction, to maintain the balance of the accounting equation.

Debits and Credits

Fundamental elements of double-entry bookkeeping, where debits represent increases in assets or expenses and credits signify increases in liabilities, equity, or income.

Transaction

An agreement or exchange between two or more parties that is recorded and has a financial impact on the business.