All of the Following Are Common Measures Used to Manage

question 19

Multiple Choice

All of the following are common measures used to manage currency fluctuation in international purchasing except _____.

• A)letters of credit
• B)purchase in U.S.dollars
• C)sharing currency fluctuation risk
• D)currency adjustment contract clauses
• E)currency hedging

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Definitions:

Demand for U.S. Dollars

The desire or need by individuals, businesses, and governments worldwide to hold assets in the form of U.S. currency, influenced by factors such as interest rates and economic stability.

Crowding Out

The phenomenon where increased government borrowing leads to higher interest rates, reducing private investment and spending in the economy.

Real GDP

The measure of a country's gross domestic product adjusted for inflation, reflecting the real value of goods and services produced.

Marginal Propensity

The ratio of change in consumption to the change in income, indicating how much of additional income will be spent or saved.