Which of the Following Best Illustrates the Elimination of Transaction

question 39

Multiple Choice

Which of the following best illustrates the elimination of transaction costs that result from the adoption of the euro as the single European currency?

• A) When a German company imports French wine it no longer needs to use a bank in completing the transaction.
• B) When a German company makes purchasing plans that involve importing French wine it knows exactly what the cost will be in terms of its own currency.
• C) When a German company imports French wine it no longer has to pay a tariff on the wine.
• D) When a German company imports French wine it no longer has to pay a charge for converting German currency into French currency.

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Definitions:

Disclosed Principal

A principal whose identity is known by the third party at the time of entering into a contract with an agent.

Terminates

The act of bringing something to an end or conclusion, often referring to the cessation of agreements, employment, or processes.

Express Authority

Authority granted to an agent in clear, definite terms, verbally or in writing, by the principal in an agency relationship.

Legal Representative

An individual or entity authorized to act on behalf of another in legal matters or proceedings.