Why Do Governments Limit Currency Convertibility

question 36

Multiple Choice

Why do governments limit currency convertibility?

• A) To preserve foreign exchange reserves.
• B) To spend foreign exchange reserves.
• C) To keep domestic companies from investing abroad.
• D) To allow nonresidents to convert money to foreign currencies.

---

Definitions:

Bad-News Messages

Communications designed to convey information that might be disappointing, unwelcome, or unfavorable to the receiver, handled with care to mitigate negative reactions.

Negative-News Situation

A scenario where unpleasant information has to be communicated, often requiring careful word choice and tone.

Preliminary Explanation

An initial statement or rationale provided to give background or context before the main discussion, argument, or presentation.

Cushion

A soft, padded item used for sitting, kneeling, or to soften the hardness or angularity of a chair or couch.