If domestic residents are restricted in their ability to purchase foreign assets then their government is imposing:

Question

Quizplus · Accepted Answer

If domestic residents are restricted in their ability to purchase foreign assets, it implies that their government is imposing controls on capital outflows. Capital outflow controls are aimed at limiting the amount of money flowing out of a country's borders to purchase foreign assets. These controls are implemented to manage the balance of payments, maintain the value of the domestic currency, and prevent financial instability. Controls on capital inflows, on the other hand, restrict the entry of foreign funds into a country.

If Domestic Residents Are Restricted in Their Ability to Purchase