Suppose That Mickey's Clothing Moved Its Operations Out of Korea

question 74

Multiple Choice

Suppose that Mickey's Clothing moved its operations out of Korea and into China because of the lower wages in China. Now, the wages in Korea are such that it would be cheaper to manufacture the clothes in Korea than it is in China. This is an example of:

• A) Transitory price fluctuations.
• B) Short-run exposure.
• C) Economic exposure.
• D) Transactions exposure.
• E) Forward exposure.

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Definitions:

Legal Subject Matter

The specific area or topic within the field of law that is under discussion, analysis, or consideration.

Statute of Frauds

A legal principle requiring certain types of contracts to be in writing and signed by the involved parties, to prevent fraud.

Force Majeure

A legal clause exempting parties from fulfilling contractual obligations due to unforeseeable circumstances beyond their control, such as natural disasters.

Oral Agreement

A verbal commitment between two or more parties on a set of terms, which can be legally binding in certain circumstances.