Sometimes the Overall Performance of an MNC May Already Be

question 68

True/False

Sometimes the overall performance of an MNC may already be insulated by offsetting effects between subsidiaries, and it may not be necessary to hedge the position of each individual subsidiary.

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Definitions:

Economic Profits

The variance between total income and the aggregate of explicit and implicit costs for a business.

General Equilibrium

A state in an economy where all markets are in equilibrium simultaneously, and the decisions of consumers and producers are perfectly coordinated.

Pareto Efficiency

An economic state where resources are allocated in a way that it is impossible to make one individual better off without making another individual worse off.

Simultaneous Equilibrium

A situation in which multiple markets or economic variables reach equilibrium at the same time, with interdependencies considered.