Explicit Capital Controls Are

question 4

Multiple Choice

Explicit capital controls are

• A)used by most industrialized countries.
• B)an important reason why domestic and foreign assets are not perfect substitutes.
• C)less important than information barriers as an obstacle to the international diversification of portfolios.
• D)the most important reason why interest rates differ internationally on assets with similar risk and liquidity characteristics.

---

Definitions:

Fixed Inputs

Resources used in production that don't change in quantity as the level of production increases or decreases.

Cost of Capital

The cost of capital represents the return rate that investors expect of a company to generate from its projects to be worth the risk of the investment.

Accountants

Professionals who manage and examine financial records for individuals, companies, or organizations.

Economists

Professionals who study the production, distribution, and consumption of goods and services, analyzing how economies work and how economic agents interact.