Figure 3 Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow. Graph (a) Graph (b) REAL INTEREST RATE 525 d $ QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE stay at r2. b. decrease because supply would shift right. c. increase because supply would shift left. d. decrease because demand would shift left. REAL INTEREST RATE NCO D. d NET CAPITAL OUTFLOW Graph (c) S, 5, 5, D 3 QUANTITY OF DOLLARS Refer to Figure 3. If the interest rate were initially at r2 and an import quota were imposed, the interest rate would a.

Brief Principles of Macroeconomics (MindTap Course List)
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Chapter18: Six Debates Over Macroeconomic Policy
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Figure 3
Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow.
Graph (a)
Graph (b)
REAL INTEREST RATE
555
ď
Wi
QUANTITY OF LOANABLE FUNDS
REAL EXCHANGE RATE
b. decrease because supply would shift right.
c. increase because supply would shift left.
d. decrease because demand would shift left.
REAL INTEREST RATE
NCO
D
NET CAPITAL OUTFLOW
D₂
Graph (c)
S, S, S,
C
QUANTITY OF DOLLARS
Refer to Figure 3. If the interest rate were initially at r2 and an import quota were imposed, the interest rate would
a. stay at r2.
Transcribed Image Text:Figure 3 Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow. Graph (a) Graph (b) REAL INTEREST RATE 555 ď Wi QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE b. decrease because supply would shift right. c. increase because supply would shift left. d. decrease because demand would shift left. REAL INTEREST RATE NCO D NET CAPITAL OUTFLOW D₂ Graph (c) S, S, S, C QUANTITY OF DOLLARS Refer to Figure 3. If the interest rate were initially at r2 and an import quota were imposed, the interest rate would a. stay at r2.
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