An MNC's Cash Flows Are Likely to Be Less Volatile

question 27

Multiple Choice

An MNC's cash flows are likely to be less volatile if its percentage of foreign sales is ____ and the number of foreign countries it sells products to is ____.

• A) high; large
• B) high; small
• C) low; small
• D) high; large.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Budget Deficit

The financial situation where a government's expenditures exceed its revenues within a specified period.

Flow Variable

A quantity measured over a specified period of time, indicating the rate of change in a variable.

Stock Variable

A quantity measured at a specific point in time, representing a snapshot of a certain value, such as the amount of money in a savings account.