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A country with high interest rate will allow foreign investors to produce goods cheaply and they can earn higher profits in that country, why is that?
There is no reason for the statement as you have typed it to be true!
If the country has higher interest rates than the home country then the currency will depreciate, which means the costs in the other country will be lower (when measured in the home country’s currency), but that does not mean that the profits earned in the other country will be higher (if they are selling in that other country as well).
sorry sir let me type this question again on a different thread as i am still not able to understand the effect. this question was actually picked from past exam named Okan co
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