Suppose that the dollar buys more coffee in Honduras than in Guatemala. How could traders make a profit?
A) by buying coffee in Honduras and selling it in Guatemala, which would tend to raise the price of coffee in Honduras
B) by buying coffee in Honduras and selling it in Guatemala, which would tend to raise the price of coffee in Guatemala
C) by buying coffee in Guatemala and selling it in Honduras, which would tend to raise the price of coffee in Guatemala
D) by buying coffee in Guatemala and selling it in Honduras, which would tend to raise the price of coffee in Honduras

Question

Quizplus · Accepted Answer

BTraders could make a profit by buying coffee in Honduras, where it's cheaper, and selling it in Guatemala, where it's more expensive. This would tend to raise the price in Honduras due to increased demand and potentially raise the price in Guatemala due to increased supply.

Suppose That the Dollar Buys More Coffee in Honduras Than