Interest Rates Among Countries
As of today, the interest rate in Countries X, Y, and Z, are similar. In the next month, Country X is expected to have a weak economy, while Countries Y and Z are expected to experience a 6% increase in economic growth. However, conditions this month will also cause an increase in default risk of borrowers in Country Z in the next month because of political concerns, while the default risk of Countries X and Y remain unchanged. During the next month, which country should have the highest interest rate? Which country should have the lowest interest rate?