Which statement could be prompted by an interest rate that is temporarily higher in Canada than in the rest of the world?
A) A Swiss bank purchases a Canadian bond instead of the German bond it had considered purchasing.
B) Canadian firms decide,because interest rates are higher,to do more investment spending.
C) Brad,a Canadian resident,decides to spend his savings on a trip to Hawaii.
D) Canadian net capital outflow increases.

Question

Quizplus · Accepted Answer

When interest rates are higher in Canada, foreign investors, like a Swiss bank, are more likely to purchase Canadian bonds to take advantage of the higher returns, making option A correct.

Which Statement Could Be Prompted by an Interest Rate That