Which One of These Is an Example of Operational Hedging

question 40

Multiple Choice

Which one of these is an example of operational hedging?

• A) Producing goods in a foreign country for sale in the U.S
• B) Manufacturing goods in the country where they will be sold
• C) Producing products in one location and distributing them internationally
• D) Offsetting every spot trade with an opposing forward trade

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Definitions:

Output

The total amount of goods or services produced by a firm or economy.

Taxed Away

Refers to the reduction in income or resources that occurs as a result of taxation.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.

Monopoly

A market structure characterized by a single seller dominating the market, with no close substitutes for the product or service offered, leading to limited competition.