How Does Unpredictability in the Environment Influence the Relative Costs

question 6

Multiple Choice

How does unpredictability in the environment influence the relative costs of the two forms of economic organization?

• A)It saturates the management of contracts activity and external relationships
• B)It disrupts processes and procedures
• C)It tends to increase administrative costs of vertical integration because of the need for flexibility and speed
• D)It has no influence at all

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Definitions:

Indirect Quote

An exchange rate expressed as the amount of foreign currency one unit of domestic currency can buy.

Direct Quote

An exchange rate presented as the local currency for each unit of the international currency.

Japanese Yen

The official currency of Japan, widely recognized by its symbol ¥ and used extensively in international trade.

Forward Exchange Rate

The forward exchange rate is a contractually fixed exchange rate for a financial transaction that will occur at an agreed upon future date.