Lazer Co Is a U

question 33

Multiple Choice

Lazer Co. is a U.S. firm that exports computers to Belgium invoiced in euros and to Italy invoiced in dollars. Additionally, Lazer Co. has a subsidiary in South Korea that produces computers and sells them there. Lazer also has competitors in different countries. Lazer Co. is subject to:

• A)transaction exposure.
• B)economic exposure.
• C)translation exposure.
• D)all of the above.

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Definitions:

Income Elasticity

Measures how the quantity demanded of a good responds to a change in consumer income.

Normal Good

An item for which demand increases as the income of consumers increases, showing a direct relationship between income and demand.

Income Elasticity

A measure of how much the demand for a good changes as the income of consumers changes.

Normal Good

A good for which demand increases as the income of consumers increases, showing a positive correlation between income and demand.