In the case where interest rates are higher in Canada, which of the following is an example of a "carry trade"
a. Increase borrowing in the US, convert to Canadian dollars and invest in Canada
b. Increase borrowing in the US and invest in the US
c. Increase borrowing in Canada, convert to dollars and invest in the US
d. Increase borrowing in Canada and invest in Canada
a
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In the four-part diagram used to construct the IS curve, a decrease in the interest rate causes
A) an increase in Ap and induced saving but does not shift the IS curve. B) an increase in Ap and induced saving and shifts the IS curve to the right. C) a decrease in Ap, an increase in induced saving, and shifts the IS curve to the right. D) a decrease in Ap and a decrease in induced saving, but does not shift the IS curve.
The opportunity cost of a particular activity
a. must be the same for everyone b. is the value of all alternative activities that are forgone c. has a maximum value equal to the minimum wage d. varies from person to person e. can usually be known with certainty