Which Statement Could Be Prompted by an Interest Rate That

question 158

Multiple Choice

Which statement could be prompted by an interest rate that is temporarily higher in Canada than in the rest of the world?

• A) A Swiss bank purchases a Canadian bond instead of the German bond it had considered purchasing.
• B) Canadian firms decide,because interest rates are higher,to do more investment spending.
• C) Brad,a Canadian resident,decides to spend his savings on a trip to Hawaii.
• D) Canadian net capital outflow increases.

Understand the definition and importance of economic stability.

Comprehend the principle of ceteris paribus and its application in economic models.

Recognize and avoid common logical fallacies in economic reasoning.

Understand the concept of efficiency in economics.

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Definitions:

Production Function

A mathematical model that describes the relationship between the inputs used in production and the output of goods or services that results from those inputs.

Technology

The application of scientific knowledge for practical purposes, especially in industry and improvements in equipment, machinery, and processes.

Input Prices

refer to the costs associated with the raw materials and components required for the production of goods and services.

Variable Inputs

Resources used in production that can be adjusted in the short term to change the level of output.