MNE Cash Flows May Be Sensitive to Changes in Which

question 36

Multiple Choice

MNE cash flows may be sensitive to changes in which of the following?

• A) exchange rates
• B) interest rates
• C) commodity prices
• D) all of the above

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Definitions:

Normative Economics

The branch of economic analysis that makes prescriptions about the way the economy should work.

Allocatively Efficient

A situation where resources are distributed in a way that maximizes the net benefit to society, often where marginal cost equals marginal benefit.

Productively Efficient

A situation where goods or services are produced at the lowest possible cost, maximizing the allocation of resources.

Opportunity Cost

The drawback of dismissing the next superior alternative during the decision process.