If the Risk of Holding Assets in Foreign Countries Rises

question 166

Multiple Choice

If the risk of holding assets in foreign countries rises relative to the risk of holding U.S assets,then

• A)U.S.net capital outflow rises which increases the U.S.exchange rate.
• B)U.S.net capital outflow rises which decreases the U.S.exchange rate.
• C)U.S.net capital outflow falls which increases the U.S.exchange rate.
• D)U.S.net capital outflow falls which decreases the U.S.exchange rate.

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Definitions:

Vertical Hierarchy

An organizational structure where power and decision-making authority flow from the top down through various levels of management.

Division of Labor

Refers to the allocation of tasks among a set of individuals or groups within an organization, aimed at improving efficiency and productivity.

Boundary-Spanning Subsystem

Components of an organization that interact with the external environment to obtain inputs and distribute outputs, facilitating the exchange of information and resources.

Management and Labor

The two key groups in a workplace, where management is responsible for making decisions and directing operations, and labor refers to the workforce that executes tasks under management's direction.