To Macroeconomists, "Foreign Exchange" Refers to

question 74

Multiple Choice

To macroeconomists, "foreign exchange" refers to

• A)the price at which purchases and sales of foreign goods take place.
• B)the movement of goods and services from one country to another.
• C)the difference between exports and imports.
• D)foreign currency or various claims on it.
• E)the actual transaction that occurs as currencies are traded.

---

Definitions:

Fixed Exchange Rate

A currency valuation system in which a country’s currency value is pegged against another currency, a basket of currencies, or a commodity like gold.

Covariance

A statistical measure that indicates the degree to which two variables change together.

Standard Deviation

A statistical measurement that depicts the variability or volatility of an investment's returns.

EAFE Index

The Europe, Australasia, Far East index is a widely used index of non-U.S. stocks.