Which of the Following Should an International Manager Keep in Mind

question 6

Multiple Choice

Which of the following should an international manager keep in mind about the constantly fluctuating exchange rates?

• A) The prices the firm charges should be quoted in the firm's currency exclusively.
• B) The firm and its customers should use the exchange rate as it stands on the date of each transaction, there is no scope for an agreement between them to use any other specific exchange rate.
• C) If goods are bought from a supplier whose currency is appreciating against the buyer's currency, the buyer will have to pay a lesser amount of their currency to complete the purchase.
• D) The time taken between placement and delivery of an order can at times go up to a few months; fluctuations in the exchange rate during that time can cost or earn the firm money.

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Definitions:

International Trade

The exchange of goods and services across international borders, influenced by comparative advantages, exchange rates, and global economic policies.

Netherlands

A country in Northwestern Europe known for its flat landscape, canals, tulip fields, windmills, and cycling routes.

Exports

Products or services manufactured in a particular country and purchased by consumers in a different country, adding to the national income of the exporter.

Imports

Products or services that are transported into a country from abroad with the intent of being sold.