A Foreign Currency ________ Gives the Purchaser the Right, Not

question 58

Multiple Choice

A foreign currency ________ gives the purchaser the right, not the obligation, to buy a given amount of foreign exchange at a fixed price per unit for a specified period.

• A) future
• B) forward
• C) option
• D) swap

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Definitions:

Consumer Surplus

The difference between the total amount consumers are willing to pay and the total amount they actually pay for a good or service.

Price Floor

A government-imposed minimum price charged on goods and services, typically above equilibrium price to prevent market prices from dropping too low.

Consumer Surplus

The difference in the amount consumers would ideally pay for a service or good versus what they really spend.

Producer Surplus

The imbalance between the desired compensation by producers for a good or service and the real income they secure.