Explain What Is Meant by Capital Flight

question 11

Essay

Explain what is meant by capital flight.How would you distinguish capital flight from the normal desire of investors to diversify their portfolios by investing abroad?

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Definitions:

Short-term Pricing

Pricing strategies focused on immediate objectives rather than long-term goals, such as clearing out inventory or entering a new market.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

Fixed Costs

Costs that do not change with the level of goods or services produced in the short term.

Short Run

A period in economics where at least one factor of production is fixed, limiting the firm's ability to adjust to changes in market demand.