1. One-year bonds issued by Golden Power, a producer of solar batteries based in Canada, that pay a nominal interest rate of 7% 2. One-year bonds issued by iRain, a producer of rainwater harvesting system based in New Zealand, that pay a nominal interest rate of 9.6% A thorough study has shown that the economic situation and prospects in Canada and New Zealand are very similar. Nevertheless, Ginny decides to invest in Golden Power. Ceteris paribus, which of the following best explains Ginny's choice? Canada has more renewable resources than New Zealand. Unemployment rates in Canada are lower than in New Zealand. Inflation in Canada is more than 2.6% higher than in New Zealand. Real interest rate in Canada is lower than in New Zealand. Inflation in Canada is more than 2.6% lower than in New Zealand.
1. One-year bonds issued by Golden Power, a producer of solar batteries based in Canada, that pay a nominal interest rate of 7% 2. One-year bonds issued by iRain, a producer of rainwater harvesting system based in New Zealand, that pay a nominal interest rate of 9.6% A thorough study has shown that the economic situation and prospects in Canada and New Zealand are very similar. Nevertheless, Ginny decides to invest in Golden Power. Ceteris paribus, which of the following best explains Ginny's choice? Canada has more renewable resources than New Zealand. Unemployment rates in Canada are lower than in New Zealand. Inflation in Canada is more than 2.6% higher than in New Zealand. Real interest rate in Canada is lower than in New Zealand. Inflation in Canada is more than 2.6% lower than in New Zealand.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. One-year bonds issued by Golden Power, a producer of solar batteries based in Canada, that pay a nominal interest
rate of 7% 2. One-year bonds issued by iRain, a producer of rainwater harvesting system based in New Zealand, that
pay a nominal interest rate of 9.6% A thorough study has shown that the economic situation and prospects in Canada
and New Zealand are very similar. Nevertheless, Ginny decides to invest in Golden Power. Ceteris paribus, which of the
following best explains Ginny's choice? Canada has more renewable resources than New Zealand. Unemployment rates
in Canada are lower than in New Zealand. Inflation in Canada is more than 2.6% higher than in New Zealand. Real
interest rate in Canada is lower than in New Zealand. Inflation in Canada is more than 2.6% lower than in New Zealand.
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