An Agreement to Exchange Currencies at Some Point in the Future

question 59

Multiple Choice

An agreement to exchange currencies at some point in the future using an agreed-upon exchange rate is called a _____ trade.

• A) spot
• B) forward
• C) swap
• D) floating
• E) triangle

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Definitions:

Circular-Flow Diagram

A model that illustrates the movement of goods, services, and money between households and businesses in an economy.

Factor Market

A marketplace where services of the factors of production (labor, land, capital) are bought and sold.

Product Market

The marketplace where final goods or services are offered to consumers, businesses, and the government.

Positive

In economics, referring to factual statements or analyses about how the world is, as opposed to normative statements which are about how the world ought to be.