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According to the eclectic paradigm, <u>the monetary</u> is/ are of considerable importance in explaining both the rationale for and the direction of foreign direct investment.
The eclectic paradigm takes a holistic technique to analyze entire relationships and interactions of the various additives of an enterprise. The intention is to determine if a particular method presents a greater universal fee than another to be had country-wide or global choices for the manufacturing of goods or services.
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Answer:
Assume that the inflation rate becomes much higher in the United States relative to Canada. This will place _upward_ pressure on the value of the Canadian dollar when holding other factors constant. Also, assume that Canadian interest rates begin to rise relative to U.S. interest rates. The change in interest rates will place _upward__ pressure on the value of the Canadian dollar, when holding other factors constant.
Explanation:
The pace of increasing products and service costs in a nation is inflation. Inflation can arise when cost of production like raw materials and salaries spike in prices. Inflation can occur as the customer is prepared to pay more for the product as demand for that products and services rises. The higher the inflation the higher the pressure placed.
The reason to purchase bonds is to receive a specific, reliable return on your investment.
<h3>What are bonds?</h3>
Bonds are debt instruments which gives the bondholder to receive interest at a specified periods of time. This means that at maturity of the bond, the bondholder receives the amount invested.
Government issue bonds to support government spending and obligations, hence are safe . Also, the rate of return is usually lower when compared to stocks.
Therefore, reason to purchase bonds is to receive a specific, reliable return on your investment.
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