An open capital market affects a nation's economic growth by
A) channeling capital into productive projects and away from wasteful projects.
B) rewarding investors who find the most productive projects and invest in them.
C) making the lowest-cost capital available from around the world.
D) all of the above.

Question

Quizplus · Accepted Answer

An open capital market provides access to capital from around the world, which increases competition and results in lower borrowing costs. This encourages investment in productive projects that generate economic growth, while discouraging investment in wasteful projects. Investors who can identify the most productive projects are rewarded in an open capital market, which further drives economic growth. Therefore, all of the above options are true.

An Open Capital Market Affects a Nation's Economic Growth by