A Contingent Promise by a Bank to Pay a Bill

question 36

Multiple Choice

A contingent promise by a bank to pay a bill when it comes due if the bill's originator fails to pay is an example of a

• A)swap agreement.
• B)standby letters of credit.
• C)forward contract.
• D)loan commitment.
• E)commitment to buy foreign exchange.

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Definitions:

GDP Deflator

An economic metric that converts the money-value measure of GDP into an index for quantity comparison by deflating price inflation.

Real GDP

The calculation of a nation's economic production, accounting for variations in prices due to inflation or deflation, to represent the actual value of goods and services generated.

Real Terms

Adjusted for inflation, reflecting the actual purchasing power of money.

Real GDP Per Capita

A measure that adjusts Gross Domestic Product (GDP) for inflation and divides it by the total population, reflecting the average economic output per person.