Figure 13-2 -Refer to the FigurE₁3-2.Suppose That These Diagrams Refer to Canada.If

question 120

Multiple Choice

Figure 13-2

-Refer to the FigurE₁3-2.Suppose that these diagrams refer to Canada.If the interest rate was initially at r₀ and China voluntarily restricted its exports to Canada,what would happen to the interest rate?

• A)It would stay at r₀.
• B)It would decrease because supply would shift right.
• C)It would increase because supply would shift left.
• D)It would decrease because demand would shift left.

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Definitions:

Semiannual

Occurring twice a year; a term often used in the context of payments, reporting periods, or interest calculations.

Par Value

A nominal value assigned to a share of stock in the charter of a corporation, unrelated to market value.

Effective Interest Amortization

A method of allocating loan interest payments over the life of the loan, taking into account the varying principal amounts.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time, typically expressed as an annual rate.