Which of the Following Is Not a Potential Problem for Emerging

question 28

Multiple Choice

Which of the following is not a potential problem for emerging economies which liberalize their capital accounts to allow funds to flow in from developed countries?

• A) Asymmetric information can cause funds to be directed into unprofitable sectors
• B) A sudden withdrawal of foreign funds could create a recession
• C) A weak banking sector can generate excessive risk taking as funds flow in
• D) The inflows may be volatile and thus unpredictable
• E) Investment could exceed the level of domestic saving

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Definitions:

Action Potential

A sudden change in electrical charge across a cell membrane, resulting in a rapid signal that can travel along neurons.

Cell Membrane

A biological membrane that separates the interior of all cells from the outside environment, controlling the passage of substances.

Voltage

The difference in electric potential between two points, crucial in the generation and transmission of nerve impulses in neurons.

Refractory Periods

Time intervals following an action potential during which a neuron is incapable of firing again or the threshold for firing is elevated.