The Two Types of Trade, Intertemporal and Pure Asset Swap

question 86

Multiple Choice

The two types of trade, intertemporal and pure asset swap ________ perfect substitutes, because ________.

• A) are; they both offer considerable payoff and are equal in the long run
• B) are; they both involve the smoothing out of now and future consumption
• C) are not; asset swapping is immediate and involves only assets, while intertemporal trade takes two time periods and involves both assets and goods/services
• D) could possibly be; different economic states occur at different points in time
• E) are not; asset swapping never relates to intertemporal trade

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