Arbitrage Opportunities Abound in the Foreign Exchange Markets and They

question 86

True/False

Arbitrage opportunities abound in the foreign exchange markets and they tend to be available for long periods of time.

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Definitions:

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from total revenue, often indicating the degree of profitability beyond normal expectations.

Excess Capacity

A situation where a company can produce more goods than the market demands, often leading to inefficiencies.

Monopolistic Competition

A market structure featuring many firms selling products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Chronic Excess Capacity

A persistent situation in which industries or firms have more production capacity available than is being used, often leading to economic inefficiencies and reduced profit margins.