With Free Movement of Capital Internationally, the Principle of Convergence

question 60

Multiple Choice

With free movement of capital internationally, the principle of convergence postulates that:

• A) at some future time, external debt and external wealth will cancel each other out.
• B) poor nations will finally adopt capitalism and free markets.
• C) when the baby-boom generation retires, the investment rate will rise to compensate.
• D) rates of return on capital investment will be equalized worldwide as investors seek the highest return.

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