Figure 13-2
-Refer to the Figure13-2.If the interest rate was initially at r0 and an import quota was imposed,what would happen to the real interest rate?
A) It would not change because the world interest rate is not affected.
B) It would decrease because supply would shift right.
C) It would not change because both supply and demand would shift right.
D) It would decrease because demand would shift left.

Question

Figure 13-2 
-Refer to the Figure13-2.If the interest rate was initially at r0 and an import quota was imposed,what would happen to the real interest rate?
A) It would not change because the world interest rate is not affected. 
B) It would decrease because supply would shift right. 
C) It would not change because both supply and demand would shift right. 
D) It would decrease because demand would shift left.

Quizplus · Accepted Answer

An import quota does not affect the world interest rate, so the real interest rate remains unchanged.

Figure 13-2 -Refer to the Figure13-2.If the Interest Rate Was Initially at Was