Consider this statement: "Canada is characterized by perfect capital mobility." Which of the following best explains what this statement means?
A) that labour can easily move across Canada's borders
B) that purchasing-power parity holds in Canada
C) that Canada's net foreign investment is zero
D) that investors' funds can easily move across Canada's borders

Question

Quizplus · Accepted Answer

Perfect capital mobility refers to the ability of investors to move their funds in and out of a country without any restrictions or barriers. Therefore, option D is the best choice as it accurately describes this concept. Option A is incorrect as the statement is referring to capital mobility, not labour mobility. Option B is also incorrect as purchasing-power parity is a separate concept from capital mobility. Option C is incorrect as Canada's net foreign investment could be positive or negative, and it does not necessarily indicate the level of capital mobility.

Consider This Statement: "Canada Is Characterized by Perfect Capital Mobility