Growth rates of the (1) labour force, (2) average number of hours worked and (3) labour productivity are the main determinants of a foreign country's
A) dividend payout ratio.
B) beta.
C) real risk free rate.
D) nominal risk free rate.
E) risk premium.

Question

Quizplus · Accepted Answer

The real risk-free rate is influenced by the growth rates of the labor force, average hours worked, and labor productivity, as these factors contribute to the potential growth rate of an economy, which in turn affects the real interest rates.

Growth Rates of the (1) Labour Force, (2) Average Number