A Spot Transaction Occurs When One Currency Is

question 112

Multiple Choice

A spot transaction occurs when one currency is

• A) deposited in a foreign bank.
• B) immediately exchanged for another currency.
• C) exchanged for another currency at a specified price.
• D) traded for another at an agreed-upon future price.

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Definitions:

Utility Function

A mathematical representation that ranks the preferences of an individual consumer for different bundles of goods.

Initial Endowment

The original allocation of resources, including assets and goods, available to an individual or entity at the start of an economic analysis.

Utility Function

A formula that quantifies the happiness or satisfaction a consumer gains from consuming different combinations of goods and services.

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources or goods between two parties and to illustrate potential gains from trade.