Why may a "black market" develop in nations in which government has imposed capital controls?
a. All foreign currency purchases and sales are conducted and controlled by the government, and it is illegal to trade privately.
b. Traders are trying to avoid the taxes they must pay on each transaction.
c. The government makes a huge profit on currency trades that the private sector wants access to.
d. None of these explains why a "black market" may develop in these nations.
Ans: a. All foreign currency purchases and sales are conducted and controlled by the government, and it is illegal to trade privately
You might also like to view...
Government stabilization policy would be unnecessary if the economy automatically gravitated toward
A. full inflation. B. full employment. C. full recession. D. an inflationary gap.
The Agriculture Adjustment Act of the Roosevelt Administration attempted to boost prices of agriculture products by
a. increasing the money supply from year to year at a constant rate. b. decreasing the money supply through a policy of monetary contraction. c. increasing demand through lower taxes and budget deficits. d. reducing supply through the planned destruction of agricultural crops and livestock.
Answer the next question based on the following demand and cost data for a specific firm.Demand DataCost Data(1) Price(2) Price(3) QuantityTotal OutputTotal Cost$50$3522$4545303355402544703520559030156611525107714520588180Suppose that entry of firms into the industry changes this firm's demand schedule from columns 1 and 3 to columns 2 and 3. Maximum economic profit will decrease to
A. zero. B. $25. C. $35. D. $70.
The local department store might have been considered ________ before technological change.
A. a perfect competitor B. a natural monopoly C. an oligopoly D. a monopoly