If the Index of Export Prices Increases from 120 to 150

question 37

Multiple Choice

If the index of export prices increases from 120 to 150 and the index of import prices increases from 100 to 125, it may be said that

• A)there is insufficient information to calculate the terms of trade.
• B)there has been no change in the terms of trade.
• C)the terms of trade have improved.
• D)the terms of trade have improved by 10 percent.
• E)the terms of trade have deteriorated.

Comprehend the objective and implications of transfer pricing to encourage divisional cooperation and increase overall company income.

Recognize the impact of the balanced scorecard in evaluating both financial and nonfinancial performance metrics.

Understand the negotiation process for transfer pricing and its benefits, especially when there is unused capacity.

Grasp how service department charges and other expenses are allocated and impact departmental and overall company performance.

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Definitions:

Vroom, Yetton, Jago DECISION-MAKING Model

A situational leadership model that outlines how leaders can make effective decisions by evaluating the importance of the decision, the necessity of quality, and the acceptance of others.

Authority Decisions

relate to choices or judgments made by individuals or bodies holding power or command within an organization.

Manager

An individual responsible for directing, controlling, and administering an organization or group, overseeing tasks, and making decisions.

Confirmation Error

The tendency to seek confirmation for what is already thought to be true and not search for disconfirming information.