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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.

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Explanation:

they provide goods (i)

because they are small it can be personalised

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2 years ago
A task performed by an organization or organizational subunit in support of the organization's overall mission is referred to as
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Answer:

business process

Explanation:

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5 0
3 years ago
A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $100 per day. Assume
ollegr [7]

Answer:

a. What is the MRP? What is the MRC? Should the firm add this delivery vehicle?

marginal revenue product = marginal product of labor x marginal revenue per output unit

MRP = 1,500 packages x $0.10 per package = $150

marginal resource cost (MRC) = $100 (the cost of renting the delivery truck)

The company should add the delivery truck because MRP is higher than MRC.

b. Now suppose that the cost of renting a vehicle doubles to $200 per day. What are the MRP and MRC in this situation?

MRP = $150 (doesn't change from question a)

MRC = $200 (the cost of renting the delivery truck)

The company should not add the delivery truck because MRP is less than MRC.

c. Next suppose that the cost of renting a vehicle falls back down to $100 per day, but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation? Would adding a vehicle under these circumstances increase the firm's profits?

MRP = 750 packages x $0.10 per package = $75

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The company should not add the delivery truck because MRP is less than MRC.

8 0
3 years ago
In 2006, Ford Motor Company announced it would severely cut back its automobile production. For parts companies supplying Ford i
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Based on the effect this would have on the companies supplying Ford, this is a <u>Threat</u>.

<h3>What is a Threat?</h3>
  • It is one of the factors involved in a SWOT Analysis.
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If Ford cuts back production, those supplying it would have to supply less which would hurt profits. This is therefore a threat.

Find out more on the SWOT Analysis at brainly.com/question/1438685.

3 0
2 years ago
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