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

Question

Quizplus · Accepted Answer

Traders can profit by exploiting the price difference, buying cheaper bananas in Honduras and selling them at a higher price in Guatemala, which would increase demand and prices in Honduras.

Suppose That the Dollar Buys More Bananas in Honduras Than