Whenever Nations Remove Capital Controls on Their Currencies

question 133

Multiple Choice

Whenever nations remove capital controls on their currencies:

• A) returns are equalized and arbitrage opportunities disappear.
• B) there is no opportunity for trade or arbitrage, and differences in returns disappear.
• C) the government sets the returns on its currency, so traders cannot make profits.
• D) in those nations, because government has ensured its safety, capital is free to move.

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