Once Capital Markets Are Integrated,it Is Difficult for a Country

question 54

Multiple Choice

Once capital markets are integrated,it is difficult for a country to maintain a fixed exchange rate.Why?

• A)The market forces may be stronger than the exchange rate intervention that the government can muster.
• B)Portfolio managers will not invest in countries with fixed exchange rates.
• C)Because of the Tobin Tax.
• D)none of the options

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Definitions:

Demurrer

A civil motion that attacks the plaintiff’s complaint by assuming the truth of the facts stated in the complaint for purposes of the motion, and by arguing that even if these facts are true, there is no rule of law entitling the plaintiff to recovery. Roughly similar to the motion to dismiss for failure to state a claim on which relief can be granted.

Interrogatory

A written question that one party in a lawsuit sends to another party as part of the discovery process, which must be answered in writing and under oath.

Directed Verdict

A verdict issued by a judge who has, in effect, taken the case away from the jury by directing a verdict for one party. Usually, the motion for a directed verdict is made at trial by one party after the other party has finished presenting his evidence.

Depositions

Formal, recorded testimonies of witnesses taken under oath outside of court, used in the discovery process before a trial.