Figure 13-2 Real Interest A Rate Supply of Loara ble Funds World interest rate, To Demand for Loa rable Funds Quantity of Loanable Funds Real Exchange + Supply of Canadian Ra te Dollars (S-1) E1 mm Do D. Quantity of Dollars 5. Refer to the Figure13-2. If the economy were initially in equilibrium at r0 and EO and the government removed import quotas, what would happen to the exchange rate? a. It would appreciate to El. b. It would appreciate to E2. d c. It would depreciate to El. It would depreciate to B2