How Did the Real Interest Rates Paid on Long-Term Government

question 193

Multiple Choice

How did the real interest rates paid on long-term government debt in Canada and the United States compare with each other over the period from 1984 to 2017?

• A) The average real interest rate was 3.4 percent in Canada and 4.4 percent in the United States.
• B) The average real interest rate was 3.5 percent in Canada and 2.8 percent in the United States.
• C) The average real interest rate was 5.7 percent in Canada and 6.7 percent in the United States.
• D) The average real interest rate was 6.7 percent in Canada and 5.7 percent in the United States.

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Definitions:

Quantity Effect

The impact on the total quantity bought or sold in a market as a result of changes in price.

Least Elastic

Refers to the good or service with the least sensitivity to changes in price, meaning the quantity demanded or supplied changes very little with price changes.

Immediate Market Period

A very short time frame in market analysis where the supply of goods is fixed.

Price Elasticity

An indicator showing the degree to which the demand for a product changes in response to a price change for that product, calculated as a percentage.