Generally, exchange rates are quoted as a single price of a unit of foreign currency rather than a ratio because:
a. the ratio of the units of home currency to units of foreign currency is always equal to one.
b. the denominator is always equal to one.
c. the price is fixed by the government.
d. the rate is adjustable in increments of 25 basis points.
Ans: b. the denominator is always equal to one.
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Mechanisms that manufacturers can use to deal with misaligned retailer incentives include
a. setting a minimum retail price b. allowing many retailers to sell the product in each market c. preventing retailers from compensating sales staff for demonstrating the product d. eliminate manufacturer staff that was demonstrating the product in stores
Which of the following is the best example of a tariff?
A) a subsidy from the U.S. government to domestic manufacturers of residential air conditioners to enable them to compete more effectively with foreign producers B) a limit on the quantity of residential air conditioners that can be imported from a foreign country C) a $150 fee imposed on all imported residential air conditioners D) a tax placed on all residential air conditioners sold in the domestic market to help offset the impact of emissions on the environment