1. Which of the following statement is incorrect?

a. Calvin Klein, Liz Claiborne, The Gap, and other garment industry companies that manufacture clothing outside of the United States to control labor costs must balance the moral issues of human rights against their obligations to stockholders.

b. Psychological and political factors also affect exchange rates.

c. Most of the answers are correct.

d. When the U.S. dollar strengthens against the Mexican peso, U.S. importers of Mexican goods will require more dollars to purchase Mexican goods that are sold in pesos.

e. The risk that a multinational corporation faces due to fluctuating exchange rates can be managed by using forward contracts, futures contracts, and currency swaps.

2. Which of the following countries is not a member of the EU?

a. Croatia

b. Netherlands

c. Great Britain

d. none of the answers is correct

e. Ireland