The Zara Experience Involves a Regular Supply of New Stock

question 24

Multiple Choice

The Zara experience involves a regular supply of new stock on the shelves, because of which customers tend to visit Zara's stores more often than they visit other retailers' stores. However, such a policy will become more expensive to maintain if:

• A) star designers demand a higher fee for its designs.
• B) PDAs are not used.
• C) fuel costs rise.
• D) Zara's horizontal integration fails.
• E) Zara outsources its production process.

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Definitions:

Loanable Funds

The money available for borrowing in the financial market, determined by the level of savings and the supply of credit.

National Saving

The total of private savings and government savings, essentially the portion of national income that is not consumed or spent by government.

Open-Economy Macroeconomic Model

A framework used to evaluate the interactions between a country’s macroeconomy and the global economy, taking into account trade, foreign investment, and exchange rates.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the real cost of funds to the borrower and the real yield to the lender.