Which of the Following Is True of Capital Controls

question 33

Multiple Choice

Which of the following is true of capital controls?

• A)They cannot be used to maintain a fixed exchange rate.
• B)They are socially inefficient methods of maintaining a fixed exchange rate.
• C)They can be optimal when a disequilibrium is fundamental.
• D)They are key to the success of a fixed exchange rate regime.

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Definitions:

Consensus

A general agreement among various groups on a fundamental issue, often achieved through negotiation and dialogue.

Inevitability of Progress

The belief that societal, technological, or economic advancement is a natural, unavoidable process.

Industrial Modernity

A period characterized by the transition to industrial production methods and its resulting societal changes, including urbanization and the emergence of modern state forms.

Western Culture

The social norms, ethical values, traditional customs, belief systems, political systems, and specific artifacts and technologies that have originated or are associated with Europe and the Western world.