Which of the following would be consistent with an increase in the Canadian real interest rate?
A)A Swiss bank purchases a Canadian bond instead of the German bond it had considered purchasing.
B)Canadian firms decide, since interest rates are higher, to do more investment spending.
C)Brad, a Canadian resident, decides to put less money in his savings account than he had planned to.
D)Canadian net exports increase.

Question

Quizplus · Accepted Answer

An increase in the Canadian real interest rate would make Canadian bonds more attractive to foreign investors, like a Swiss bank, compared to bonds from other countries, such as Germany.

Which of the Following Would Be Consistent with an Increase