Refer to Figure 32-5. Suppose that initially the economy is in equilibrium at the real interest rate ri (point d) and the real exchange rate es (point f). If the government removes import quotas, the exchange rate will move to a.e4. b. es. cez d. e3 Figure 32-5 Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow. Graph (a) Graph (b) REAL INTEREST RATE d' D QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE D: REAL INTEREST RATE NCO NET CAPITAL OUTFLOW Graph (c) S, S. S₁ O

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter19: The Macroeconomic Perspective
Section: Chapter Questions
Problem 25CTQ: Cross country comparisons of GDP per capita typically use purchasing power parity equivalent...
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Refer to Figure 32-5. Suppose that initially the economy is in equilibrium at the real interest rate ri (point d) and the real
exchange rate es (point f). If the government removes import quotas, the exchange rate will move to
a.e4.
b. es.
cez
d. e3
Transcribed Image Text:Refer to Figure 32-5. Suppose that initially the economy is in equilibrium at the real interest rate ri (point d) and the real exchange rate es (point f). If the government removes import quotas, the exchange rate will move to a.e4. b. es. cez d. e3
Figure 32-5
Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow.
Graph (a)
Graph (b)
REAL INTEREST RATE
d'
D
QUANTITY OF LOANABLE FUNDS
REAL EXCHANGE RATE
D:
REAL INTEREST RATE
NCO
NET CAPITAL OUTFLOW
Graph (c)
S, S. S₁
O
Transcribed Image Text:Figure 32-5 Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow. Graph (a) Graph (b) REAL INTEREST RATE d' D QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE D: REAL INTEREST RATE NCO NET CAPITAL OUTFLOW Graph (c) S, S. S₁ O
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