Which Term Is Defined as Having International Operations in a World

question 25

Multiple Choice

Which term is defined as having international operations in a world where relative currency values change?

• A)Political risk
• B)Relative purchasing power parity
• C)Interest rate parity
• D)Absolute purchasing power parity
• E)Exchange rate risk

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Definitions:

Decentralization

The distribution of decision-making powers and authority away from a central location or authority to local or individual actors.

Authority

The legal or rightful power or right to make decisions, give orders, and enforce rules within a particular scope or role.

Operating Decisions

Choices made by management regarding the day-to-day operations of a business, such as pricing, inventory management, and employment levels.

Profit Center

A decentralized unit in which the manager has the responsibility and the authority to make decisions that affect both costs and revenues (and thus profits).