If the Euro/U

question 52

Multiple Choice

If the euro/U.S.dollar exchange rate is 1.1€/U.S. $ in New York but 1.05€/U.S. $ in London, we should see:

• A) people selling U.S. dollars and buying euros in New York and then selling those euros and buying $'s in London.
• B) people selling euros and buying dollars in New York and then buying euros by selling dollars in London.
• C) the price differential between the markets increase as people seek to take advantage of the situation.
• D) the dollar should appreciate in New York relative to the euro.

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Definitions:

Gaining Distribution

The process of making a product available in new retail outlets or channels.

Product Life Cycle

The stages a product goes through from development and introduction to the market, through growth and maturity, and eventually decline and withdrawal.

Introduction Stage

The phase in the product life cycle where a new product is launched into the market, characterized by low sales and potentially high costs.

Stimulate Trial

Marketing efforts aimed at encouraging potential customers to try a product or service for the first time.