If the Exchange Rate Between the U

question 103

Multiple Choice

If the exchange rate between the U.S.dollar and the Indian rupee (rupees per dollar) is greater than the relative purchasing power between the two countries,which of the following would be true?

• A)There are opportunities for profit by purchasing goods in India and then selling them in the United States.
• B)Purchasing power parity predicts that the value of the dollar will rise as traders take advantage of arbitrage opportunities.
• C)Purchasing power parity predicts that the dollar is undervalued as traders take advantage of arbitrage opportunities.
• D)There are no arbitrage opportunities for which traders can take advantage.

Understand the process and elements involved in conducting a SWOT analysis.

Recognise the various types of organisational objectives and their significance.

Appreciate the strategic management process, including strategy formulation and strategic planning.

Understand the concepts of diversification, vertical and horizontal integration, and their roles in strategic management.

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Definitions:

Availability Heuristic

A cognitive shortcut based on the first instances that pop into someone's mind upon assessing a particular subject, idea, technique, or choice.

Functional Fixedness

A psychological inclination that constrains someone to applying an artifact only in its accepted traditional role, thereby stifling creative thought and problem resolution.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a person's mind when evaluating a specific topic, concept, method or decision.

Anagrams

A word or phrase formed by rearranging the letters of another word or phrase, typically using all the original letters exactly once.