1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Mamont248 [21]
3 years ago
12

Honduras is a small economy in central america. it keeps a fixed exchange rate with the us. capital is perfectly mobile. you may

assume that interest rates are three percent in the us and six percent in honduras
Required:
What explains the difference in interest rates? State your assumptions clearly.
Business
1 answer:
rosijanka [135]3 years ago
5 0

Answer:

Given that Honduras is a small economy in Central America, and it keeps a fixed exchange rate with the US, and capital is perfectly mobile, but interest rates are three percent in the US and six percent in Honduras, the explanation of the difference in these interest rates are as follows:

Honduras has a higher interest rate, meaning that its sovereign bonds pay higher values than the American ones, as well as its banks also pay higher interests on their investments compared to American banks.

This is so for a double reason: on the one hand, because the Honduran economy is less reliable than the American economy, which is larger and therefore more solvent and capable of overcoming eventual crises, with which the risk of default is less.

On the other hand, the Honduran economy is more dependent on foreign investment, so it must offer higher interest rates to attract such investments.

You might be interested in
Why is it important for a human resource manager to carefully maintain<br> employee records?
aleksklad [387]

Answer:

Certain records require employee privacy to be protected. Not maintaining and following best practices for employee record keeping leaves you vulnerable to defending yourself against lawsuits, labor investigations or audits.

Explanation:

8 0
3 years ago
Read 2 more answers
Anthony is deciding between different saving accounts at his bank.he has four options,based on how frequently interest compounds
puteri [66]
The appropriate response is Daily Compounding. Progressive accrual is the expansion important to the key total of an advance or store, or as it were, enthusiasm on intrigue. It is the aftereffect of reinvesting premium, instead of paying it out, so that enthusiasm for the following time frame is then earned on the chief total in addition to the already gathered premium.
3 0
3 years ago
Which of the following costs is a mixed cost?
koban [17]

Answer:

3. Rental costs of $5,000 per month plus $.30 per machine hour of use

Explanation:

Mixed cost is the one which has both the factors, variable and fixed.

Sometimes, the segregation is also difficult, when the total cost is given.

In the chosen option also, there is a fixed cost involved that is monthly expense of $5,000.

Further for each hour of machine used the cost increases and is $0.30 per hour.

That is variable as the total will depend upon the number of hours the machine is used.

All the other three are either completely fixed like salary, and depreciation, or either completely variable like electricity cost.

7 0
3 years ago
The local baseball team owner hires you to help maximize the team's profits. You are told that costs are constant because enough
ozzi

Answer:

increase price per ticket.

Explanation:

increase price per ticket in proportion to cost incurred.

set up an internal control system to ensure all revenue from ticket are well accounted for.

3 0
3 years ago
On the statement of cash flows, the investing activities section would include a.cash paid for retirement of bonds payable b.cas
____ [38]
C I think is the right answer
7 0
3 years ago
Other questions:
  • Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transaction
    5·1 answer
  • In IBP Exercise 09-03 you ran an MRP to produce only the Silver Deluxe Touring Bikes. Now, you can pick up where you left off an
    14·1 answer
  • The Digby's workforce complement will grow by 20% (rounded to the nearest person) next year. Ignoring downsizing from automating
    14·1 answer
  • Roberto designers was organized on January 1,2021. The firm was authorized to issue 100,00 shares of $5 par value common stock.
    9·1 answer
  • Cheryl is taking classes at an institution that offers face-to-face time with her instructor and classmates and also online time
    10·1 answer
  • The specific protection that the insurer provides to the policy holder is known as which of the following?
    7·2 answers
  • A project has a net present value of zero. Which one of the following best describes this project?The project has a zero percent
    5·1 answer
  • Clark had no stock transactions in 2018​, so the change in​ stockholders' equity for 2018 was due to net income and dividends. I
    12·1 answer
  • Steeler Towel Company estimates its overhead to be $203,000. It expects to have 58,000 direct labor hours costing $1,015,000 in
    10·1 answer
  • 1. Which of the following statements is false?
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!