In a Foreign Exchange Market

question 82

Multiple Choice

In a foreign exchange market:

• A)exporters are exposed to the risk of an appreciation of the domestic currency
• B)domestic companies can borrow in a foreign currency
• C)importers sell foreign currency
• D)investors in foreign assets are exposed to the risk of an appreciation in the foreign currency
• E)investors can buy foreign securities.

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Definitions:

Third-Degree Price Discrimination

Practice of dividing consumers into two or more groups.

Price Elasticities

Measures of how the quantity demanded or supplied of a good responds to a change in its price.

Marginal Revenue

The additional income gained from selling one more unit of a product or service.

Third-Degree Price Discrimination

A pricing strategy where a seller charges different prices to different consumer groups for the same product or service, based on varying demand elasticities.