When It Is Possible to Trade Two Separate Currencies for a Common

question 99

Multiple Choice

When it is possible to trade two separate currencies for a common third currency, economists refer to profit opportunities as:

• A) backward arbitrage.
• B) speculation.
• C) triangular arbitrage.
• D) forced equilibrium.

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Definitions:

Disposable Income

The cash reserves left for households to spend and save after paying income taxes.

Disposable Income

Funds households have for saving and spending following the deduction of income taxes.

Disposable Income

Disposable income for households after accounting for income taxes, meant for spending and saving.

Marginal Propensity

The ratio of change in an economic variable, such as consumption or saving, to a change in another variable, like income.