When Using a Budget for Foreign Operations, It Is Important

question 74

True/False

When using a budget for foreign operations, it is important for the parent company to select an exchange rate to set the budget and use that same rate to evaluate performance.

---

Definitions:

Marginal Revenue Product

The additional revenue a firm generates by employing one more unit of input, typically labor.

Labor Market

A marketplace where labor services are bought (by employers) and sold (by workers), determining the allocation of labor resources and wages.

Equilibrium

A state in a market where the quantity supplied equals the quantity demanded, leading to a stable situation where there is no tendency for change.

Economic Rents

Payments made to a factor of production in excess of what is needed to keep it in its current use.