A developing economy is considering restricting the amount of money its citizens can invest abroad. What might the purpose of this restriction be?
A. to increase the degree of equality in the income distribution
B. to increase capital formation by forcing its citizens to invest in their own country
C. to reduce the nation's trade deficit so that interest rates will be reduced and capital formation will increase
D. to increase the dependency of the economy on developed economics
Answer: B
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Markets in which the Herfindahl-Hirschman index ________ are considered moderately concentrated
A) is less than 1,000 B) is zero C) is between 1,000 and 1,800 D) is above 1,800
A seller who succeeds in getting his various customers to pay different prices for the same good
A) is keeping his marginal revenue closer to his demand curve than it would otherwise be. B) is not using the marginal cost-marginal revenue formula to set prices. C) must be paying attention to overhead or sunk costs in setting prices. D) thereby misallocates resources because sales will be less than if a single price is charged.
During the contraction phase of the business cycle,
a. prices fall relative to costs, reducing profit margins. b. costs fall relative to prices, reducing profit margins. c. prices fall relative to costs, increasing profit margins. d. costs fall relative to prices, increasing profit margins.
In an open economy with flexible exchange rates, monetary policy affects consumption and investment by changing the ________ and affects net exports by changing the ________.
A. real interest rate; exchange rate B. exchange rate; real interest rate C. growth of domestic real GDP; growth of foreign real GDP D. inflation rate; unemployment rate