Which of the Following Explains Global Sourcing

question 13

Multiple Choice

Which of the following explains global sourcing? 

• A) Products are increasingly sourced from foreign, low-cost countries. 
• B) Products which are purchased to be sold locally. 
• C) Products that are sold outside of the European Community. 
• D) Products sourced from local suppliers.

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Definitions:

Transaction Costs

Transaction costs are expenses incurred when buying or selling a good or service, which include fees, taxes, and other charges associated with the transaction.

Absolute Purchasing Power Parity

A theory that suggests that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.

Forward Exchange Rates

Exchange rates determined today for currencies to be exchanged at a future date, used in hedging and speculation.

Spot Rates

The current market price of a financial instrument, commodity, or currency for immediate delivery and payment.