If interest rates rose more in the U.S. than in Canada, then other things the same
A)U.S. citizens would buy more Canadian bonds and Canadian citizens would buy more U.S. bonds.
B)U.S. citizens would buy more Canadian bonds and Canadian citizens would buy fewer U.S. bonds.
C)U.S. citizens would buy fewer Canadian bonds and Canadian citizens would buy more U.S. bonds.
D)U.S. citizens would buy fewer Canadian bonds and Canadian citizens would buy fewer U.S. bonds.

Question

Quizplus · Accepted Answer

When interest rates increase in the U.S., it becomes more attractive for U.S. citizens to invest in their own country, leading to a decrease in demand for Canadian bonds. At the same time, Canadian citizens will find U.S. bonds relatively more attractive, potentially increasing demand for U.S. bonds. Therefore, U.S. citizens would buy fewer Canadian bonds and Canadian citizens would buy more U.S. bonds.

If Interest Rates Rose More in the U