Which of the Following Is the Best Definition of Generalized

question 338

Multiple Choice

Which of the following is the best definition of generalized Fisher effect (GFE) .

• A) British and Irish government securities, including issues of local British authorities and some overseas public-sector offerings.
• B) The condition stating that the interest rate differential between two countries is equal to the difference between the forward exchange rate and the spot exchange rate.
• C) The theory that real interest rates are equal across countries.
• D) Agreement to exchange currency at some time in the future.
• E) The agreed-on exchange rate to be used in a forward trade.

---

Definitions:

Diminishing Marginal Product

The principle that as more of a variable input is added to a fixed input, the additional output gained from each new unit of input will eventually decrease.

Marginal Costs

The extra expense associated with manufacturing an additional unit of a product or service.

Marginal Returns

Marginal Returns refer to the additional output or benefit received from increasing one unit of a particular input while keeping other inputs constant.

Marginal Cost

The incremental cost associated with the production of an extra unit of a product or service.