As Long as Assets Are Perfectly Substitutable, an Increase in the Interest

question 177

Multiple Choice

As long as assets are perfectly substitutable, an increase in the interest rate in France relative to Canada will cause

• A) capital to move from Canada to France.
• B) capital to move from France to Canada.
• C) an interest rate decrease in Canada.
• D) nothing to happen because the assets are perfectly substitutable.

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