Figure 13-2 -Refer to the FigurE13-2. If the Economy Were Initially in Economy

question 174

Multiple Choice

Figure 13-2

-Refer to the FigurE13-2. 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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