Advocates of capital account liberalization emphasize each of the following except the idea that capital flows
A) enable poor countries to borrow for investment
B) smooth consumption in the face of idiosyncratic risk
C) impose discipline on policy makers
D) increase the depth and sophistication of financial markets
E) lead to factor price equalization across countries

Question

Quizplus · Accepted Answer

Advocates of capital account liberalization do not typically emphasize the idea that capital flows lead to factor price equalization across countries, which suggests that wages and returns to capital should be the same around the world.

Advocates of Capital Account Liberalization Emphasize Each of the Following