Suppose Real Interest Rates in Canada Rise, While Those in Australia

question 60

Multiple Choice

Suppose real interest rates in Canada rise, while those in Australia remain constant. Then:

• A) Australian investors should sell an increased amount of bonds issued by borrowers in Australia.
• B) Australian investors should buy an increased amount of bonds issued by borrowers in Canada.
• C) Australian investors should buy less bonds issued by borrowers in Canada.
• D) Canadian investors should buy an increased amount of bonds issued by borrowers in Australia.

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