Why does a government impose controls or restrictions on converting domestic currency to foreign currency (capital controls)?
a. The government is trying to stop the rapid decline in value of the domestic currency.
b. The government wants to speculate on its own currency
c. The government is trying to suppress international trade
d. The government is trying to avoid imposing taxes on citizens.
Ans: d. The government is trying to avoid imposing taxes on citizens.
You might also like to view...
What is the difference between an "increase in demand" and an "increase in quantity demanded"?
A) An "increase in demand" is represented by a movement along a given demand curve, while an "increase in quantity demanded" is represented by a rightward shift of the demand curve. B) There is no difference between the two terms; they both refer to a movement downward along a given demand curve. C) An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve. D) There is no difference between the two terms; they both refer to a shift of the demand curve.
A decrease in the money supply will immediately __________ the __________ interest rate, according to the "liquidity effect."
A) raise; natural B) raise; nominal C) lower; natural D) lower; nominal
If Niki is willing to pay up to $5 for an ice-cream bar but she actually pays $2 for it. The consumer surplus of the ice-cream bar for Niki
A) is $2. B) is $3. C) is $7. D) cannot be determined without information about the market structure.
Which makes it easier for a cartel to operate effectively over time?
A. The number of substitutes for the cartel's product increases. B. Demand for the cartel's product becomes more elastic. C. Each member firm observes the pricing and output decisions of other firms in the cartel. D. Demand for the cartel's product decreases.