In Some Cases, Exchange Rate Risk Could Be Shifted to Buyers

question 10

Multiple Choice

In some cases, exchange rate risk could be shifted to buyers if the buyer agrees to pay using the exporter's currency. However, there may not be a choice if the trade conventions are ____.

• A) reciprocal
• B) non-standard
• C) differentiated
• D) undifferentiated
• E) standard

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Definitions:

Foot-In-The-Door Effect

A psychological principle stating that people are more likely to agree to a large request after first agreeing to a small one.

Individualism

A philosophy that places the freedom of personal actions above the regulation by collective entities or state power.

Deceived

Refers to being misled or fooled into believing something that is not true.

Obedience Experiments

Psychological tests that study the extent to which a person can be made to comply with orders, often in conflict with personal conscience.