While Not Always True for Small Firms, Large Multinationals Can

question 6

Multiple Choice

While not always true for small firms, large multinationals can deal with currency fluctuations by

• A) using forward contracts and foreign-currency options.
• B) locating all their plants in the country that offers the most advantageous exchange position.
• C) limiting sales in each country market to reduce exposure to any one currency.
• D) following the advice of the international sales manager.

---

Definitions:

Economic Analysis

The systematic approach to determining the most efficient and effective use of resources, often involving quantitative methods.

Monopolistic Competition

A commercial ecosystem where a plethora of firms sell goods that are closely similar but not duplicate, allowing them a certain sway over market dynamics.

Complexity

The state or quality of being intricate or complicated, often referring to systems with multiple interdependent parts.

Monopolistically Competitive

A market structure in which many companies sell products that are similar but not identical, allowing for competition based on quality, price, and marketing.