6. Suppose that in Canada and in the United States, the interest rates on government bonds of...
Question:
6. Suppose that in Canada and in the United States, the interest rates on government bonds of identical matu- rity and risk are 8% and 6%, respectively. Assuming savers are indifferent between owning Canadian or U.S. bonds, what would we expect to happen to the interest rates on these bonds? Explain how this would happen.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Macroeconomics Plus Myeconlab With Pearson Global Edition
ISBN: 377221
9th Canadian Edition
Authors: Andrew B. Abel ,Ben Bernanke ,Dean Croushore
Question Posted: