Forward-Looking Market Instruments Are Used to Reduce Traders' Currency Risk

question 10

True/False

Forward-looking market instruments are used to reduce traders' currency risk.

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Definitions:

Reallocation

The process of redistributing resources or assets from less productive uses to more productive ones in order to enhance efficiency and economic output.

Diminishing Returns

A rule that asserts when one input in the production process is augmented and the rest remain unchanged, the resultant extra production will ultimately diminish.

Marginal Revenue Product

The additional revenue generated by employing one more unit of input, such as labor or capital.

Economic Rent

The excess payment made for a factor of production over its opportunity cost.