Assume That the Chinese Government Allowed the Yuan to Float

question 62

Multiple Choice

Assume that the Chinese government allowed the yuan to float relative to the U.S. dollar. Appreciation in the yuan could have an adverse affect on sales of Chinese goods to the U.S. This possible impact on Chinese exports is referred to as:

• A) translation exposure.
• B) transaction exposure.
• C) economic exposure.
• D) accounting exposure.

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Definitions:

Cost Driver Analysis

The examination of factors that influence the cost of a product or service, aimed at finding ways to improve efficiency and reduce expenses.

Root Cause

The fundamental reason for the occurrence of a problem, which when resolved, prevents a recurrence of that problem.

Cost Drivers

Factors that cause a change in the cost of an activity, including production volume, labor hours, and machine hours.

Process Perspective

An approach focusing on the activities and workflows in an organization to improve processes and achieve strategic goals.