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Question
Why is retaliation by government intervention a risky strategy?A.It encourages dumping by foreign companies.
B.It could result in increased tariff barriers by the country that is being pressured.
C.It may expose certain industries that are important for national security to foreign competition.
D.It allows firms to sell goods in the foreign market at below their fair market value.
E.It makes it difficult for domestic firms to make any investments by borrowing money from the domestic capital market.
Answer
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Related questions
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Which of the following states that for any two countries, the spot exchange rate should change in an equal amount but in the opposite direction to the difference in nominal interest rates between the two countries?
A.Bandwagon effect
B.Law of one price
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Which of the following occurs when a government increases the money supply?
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C.It makes it easier for banks to borrow from the government.
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Steven converted $1,000 to 105,000 for a trip to Japan. However, he spent only 50,000. During this period, the value of the dollar weakened against the yen. Considering a current exchange rate of $1 = 100, how many dollars did Steven spend on the trip?
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B.$523
C.$450
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Which of the following transactions is used to move out of one currency and into another for a limited period without incurring foreign exchange risk?
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B.Currency speculation
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Which of the following is illustrated by the Big Mac Index published by The Economist?
A.The law of one price
B.The purchasing power parity theorem
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Q:
To express the PPP theory in symbols, let P$ be the U.S. dollar price of a basket of particular goods and P be the price of the same basket of goods in Japanese yen. What does the purchasing power parity (PPP) theory predict to be the equivalent of the dollar/yen exchange rate, E$/?
A.E$/ = (1 + P)/P$
B.E$/ = (1 + P$)/P
C.E$/ = P/P$
D.E$/ = P$/P
E.E$/ = (1 + P$)/(1 + P)
Q:
The euro/dollar exchange rate is €1 = $1.20. According to the law of one price, how much would a camera that retails for $300 in New York sell for in Germany?
A.€320
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Q:
What is meant by translation exposure?
A.The long-run effect of changes in exchange rates on future prices, sales, and costs
B.The impact of currency exchange rate changes on the reported financial statements of a company
C.The extent to which a firm's future international earning power is affected by changes in exchange rates
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Q:
Which of the following observations is true of technical analysis, an approach to exchange rate forecasting?
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B.The variables contained in this model typically include relative money supply growth rates, inflation rates, and interest rates.
C.There is a sound theoretical rationale for the assumption of predictability underlying this approach.
D.Owing to its drawbacks, this approach has declined in importance over the last few years, giving way to fundamental analysis.
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C.borrow money in Rhodian currency, convert it into Maritian currency, and deposit it in a Maritian bank.
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E.invest in bank deposits of Rhodia and reinvest the earnings in Maritia.
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E.the ability to work on several projects simultaneously.
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Which of the following is an important attribute for a product development team to function effectively and meet all of its development milestones?
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D.It should have at least three members from each key function included.
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Which of the following factors creates a potential market for new products?
A.Rising inflation
B.Affluent consumers
C.Lack of competition among firms
D.Firms suffering from first-mover disadvantages
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What kind of demand is seen when a small change in price produces a large change in demand?
A.Elastic
B.Inelastic
C.Relative
D.Rigid
E.Dynamic
Q:
In which of the following conditions does arbitrage occur?
A.When a firm offers a product at low prices through discount coupons and promotions
B.When a firm sells a product at higher prices to make a profit from relatively fewer sales
C.When a firm imports products from a manufacturer and distributes them directly through retail outlets
D.When a firm purchases products in a country where prices are lower and resells them in a country where prices are higher
E.When a firm prices its products at the least cost, risking losses, in order to grab market share
Q:
If a firm favors a push strategy, using direct selling to educate potential consumers about the features of its products, what kind of products would it most likely sell?
A.Professional services
B.Food grains
C.Consumer products
D.Industrial products
E.Standardized products
Q:
Which of the following is true of the barriers to international communication?
A.Noise tends to increase the probability of effective communication.
B.Source effects can be beneficial for an international business when potential consumers in a target country have a bias against foreign firms.
C.Many international businesses try to promote positive source effects by deemphasizing their foreign origins.
D.Fewer firms vie for the attention of prospective customers in developing countries, thus the noise level is lower.
E.Research suggests that a consumer may use country of origin as a cue when evaluating a product, particularly if he or she has detailed knowledge of the product.
Q:
According to research, when do consumers usually use the country of origin as a cue when evaluating a product?
A.When a firm tries to deemphasize its foreign origins
B.When consumers lack detailed knowledge of a product
C.When an advertising campaign stresses the positive performance attributes of a product
D.When a limited number of messages compete with each other for consumers' attention
E.When a firm resorts to personal selling instead of mass media advertising