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Suppose interest rates are higher in Mexico than in the United States, while interest rates are lower in Chile than in the United States. Your
Suppose interest rates are higher in Mexico than in the United States, while interest rates are lower in Chile than in the United States. Your firm is considering similar opportunities in both countries that would involve producing goods for export out of the host country. If your firm believes in IRP between Mexico, the US and Chile, the best option would be to choose the Mexican opportunity.
True or false?
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