Quote:
Originally Posted by Freeway
A lower interest rate in the US discourages savings in the US and encourages borrowing and spending. A comparatively interest rate in Canada encourages people to borrow money in the US, convert it into Canadian dollars and then lend it at the Canadian rate (or save it, or otherwise invest it in Canada).
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And this is prevelant enough to raise our dollar that substantially? With the rate still lower in Canada, why would people not take out money here to lend here?
Thanks for the answers, btw, I find economics very interesting but I never progressed very far with them in school.