If the Real Interest Rate in Canada Decreases,foreign Investors Will

question 20

Multiple Choice

If the real interest rate in Canada decreases,foreign investors will ________ their demand for Canadian dollars because they desire to ________ fewer Canadian financial assets.

• A) increase; buy
• B) increase; sell
• C) decrease; buy
• D) decrease; sell

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Definitions:

Exports

Goods and services sold to other countries.

World Production

The total output of goods and services produced by all countries around the globe.

Autarky

A situation in which a country does not trade with other countries.

Comparative Advantage

The advantage conferred on an individual or country in producing a good or service if the opportunity cost of producing the good or service is lower for that individual or country than for other producers.