Limits on the flow of foreign exchange and financial investment across countries are called
A)capital controls.
B)fixed exchange rates.
C)credit constraints.
D)currency restrictions.

Question

Quizplus · Accepted Answer

Capital controls are measures taken by governments to restrict the flow of foreign exchange and financial investment across countries. These measures can include restrictions on the amount of money that can be transferred out of the country, limits on the purchase of foreign currency, and regulations on cross-border investment. Fixed exchange rates refer to a system in which the value of one currency is pegged to another currency, while credit constraints and currency restrictions do not necessarily imply limits on cross-border investment. Therefore, the best choice is A) capital controls.

Limits on the Flow of Foreign Exchange and Financial Investment