A Developing Economy Is Considering Restricting the Amount of Money

question 97

Multiple Choice

A developing economy is considering restricting the amount of money its citizens can invest abroad. What might the purpose of this restriction be?

• A) to increase the dependency of the economy on developed economics
• B) to increase capital formation by forcing its citizens to invest in their own country
• C) to reduce the nation's trade deficit so that interest rates will be reduced and capital formation will increase
• D) to increase the degree of equality in the income distribution

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Definitions:

Flexible Budget

A budget that modifies based on fluctuations in activity levels or volume.

Output

The quantity of goods or services produced in a given time period by a company, individual, or machine.

Budgeting

The process of creating a plan to spend your money, outlining anticipated income and expenses for a future period.

January

The first month of the year in the Gregorian calendar, often associated with new beginnings and resolutions.