Which of the Following Is Not a Disadvantage of Controls

question 70

Multiple Choice

Which of the following is not a disadvantage of controls on capital outflows?

• A) The controls may lead to excessive risk taking by the domestic banks.
• B) They are seldom effective during a crisis.
• C) Capital flight may increase after they are put in place.
• D) Controls often lead to an increase in government corruption.

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Definitions:

Financial Support

Monetary assistance provided to individuals or organizations to help cover costs or fund activities.

ESOP

Employee Stock Ownership Plan, a program that provides a company's workforce with an ownership interest in the company, usually in the form of stock shares.

Senior Debt Financing

A type of debt that has priority over other unsecured or otherwise more junior debt owed by the issuer in terms of repayment in the event of a sale or bankruptcy.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and gives shareholders voting rights and a dividend.