Capital Flight from the DVCs May Be Caused by

question 46

Multiple Choice

Capital flight from the DVCs may be caused by

• A)a fear of government privatization efforts.
• B)slow domestic inflation.
• C)low rates of domestic taxation.
• D)risks of severe fluctuations in exchange rates.

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Definitions:

Utility Function

A mathematical representation of how consumers rank different bundles of goods according to the levels of satisfaction those goods provide.

Numeraire

A standard unit of account in economics used to compare the value of goods and services.

Perfect Substitutes

Goods that a consumer is completely indifferent between, meaning they will substitute one for another at a constant rate regardless of any change in price or utility.

Perfect Complements

Goods that are always used together in fixed proportions, where the utility or value of one item increases with use of the other.