Other things being equal, a blocked funds restriction is more likely to have a significant adverse effect on a project if the currency of that country is expected to ____ over time, and if the interest rate in that country is relatively ____.

Question

Other things being equal, a blocked funds restriction is more likely to have a significant adverse effect on a project if the currency of that country is expected to ____ over time, and if the interest rate in that country is relatively ____.​

Quizplus · Accepted Answer

A blocked funds restriction is more likely to have a significant adverse effect on a project if the currency of that country is expected to depreciate over time. This is because the value of the funds being blocked will decrease over time, resulting in a larger loss in value. Additionally, if the interest rate in that country is relatively low, it will be harder for the project to generate enough returns to offset the loss in value caused by the depreciating currency.

Other Things Being Equal, a Blocked Funds Restriction Is More