Consider This Statement: "Canada Is Characterized by Perfect Capital Mobility

question 182

Multiple Choice

Consider this statement: "Canada is characterized by perfect capital mobility." Which of the following best explains what this statement means?

• A)that Canadians do not have access to world capital markets
• B)that foreigners do not have full access to Canadian capital markets
• C)that Canadians have full access to world financial markets and foreigners have access to Canadian financial markets
• D)that physical capital can easily be freely transported across borders

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Definitions:

Opportunity Cost

The value of the next best alternative forgone as a result of making a decision to pursue a certain action.

Economic Efficiency

The optimal distribution of resources in a manner that maximizes the total utility to all individuals in the economy.

Governmental Direction

Guidance or regulation provided by government bodies to influence or control certain activities, industries, or economic policies.

Roundabout Production

An economic concept that refers to more capital-intensive and indirect methods of production, which, although initially more time-consuming and costly, lead to greater efficiencies and outputs in the long run.