Fluctuating Exchange Rates Can Alter a Multinational Firm's Profits and Losses.The

question 17

Multiple Choice

Fluctuating exchange rates can alter a multinational firm's profits and losses.The Canadian corporation, Magna International, produces car parts and sells car parts in Europe.If the dollar depreciates against the euro, then Magna International's revenues from these operations should ________ and its costs from these operations should ________.

• A)rise; fall
• B)rise; rise
• C)fall; fall
• D)fall; rise

---

Definitions:

Free Trade

An economic policy that allows imports and exports between countries with minimal governmental restrictions or tariffs.

Consumer Surplus

The discrepancy between the sum consumers are ready and capable of paying for a service or product and the sum they actually spend.

Producer Surplus

The discrepancy between what producers anticipate accepting for a good or service and what they end up being paid.

Imported Units

Refer to products or goods brought into a country from another for sale or use.