Question

How did the real interest rates paid on long-term government debt in Canada and the United States compare with each other over the period from 1984 to 2015?

Select one:

a. The average real interest rate was 3.4 percent in Canada and 4.4 percent in the United States.

b. The average real interest rate was 3.7 percent in Canada and 3.0 percent in the United States.

c. The average real interest rate was 6.7 percent in Canada and 5.7 percent in the United States.

d. The average real interest rate was 5.7 percent in Canada and 6.7 percent in the United States.

Answer 1

Long-term interest rates are rates of government bonds maturing in ten years.

The data is

Location ▾	▾ 1984	▾ 1985	▾ 1986	▾ 1987	▾ 1988	▾ 1989	▾ 1990	▾ 1991	▾ 1992	▾ 1993	▾ 1994	▾ 1995	▾ 1996	▾ 1997	▾ 1998	▾ 1999	▾ 2000	▾ 2001	▾ 2002	▾ 2003	▾ 2004	▾ 2005	▾ 2006	▾ 2007	▾ 2008	▾ 2009	▾ 2010	▾ 2011	▾ 2012	▾ 2013	▾ 2014	▾ 2015
Canada	13.24	11.44	9.64	10.04	10.34	10.34	11.24	10.04	8.64	7.84	8.84	8.74	7.74	6.64	5.84	6.04	6.44	6.04	5.84	5.34	5.14	4.64	4.74	4.84	4.14	3.74	3.74	3.34	2.44	2.84	2.74	2.04
United States	12.4	10.6	7.7	8.4	8.8	8.5	8.6	7.9	7	5.9	7.1	6.6	6.4	6.4	5.3	5.6	6	5	4.6	4	4.3	4.3	4.8	4.6	3.7	3.3	3.2	2.8	1.8	2.4	2.5	2.1

So average of Canada is 6.7 while that of US is 5.7.

The correct option is

c. The average real interest rate was 6.7 percent in Canada and 5.7 percent in the United States.

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