A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents.The country is currently running a capital and financial account deficit.The imposition of the capital controls will cause
A)net exports to increase.
B)real domestic interest rates to rise.
C)real world interest rates to fall.
D)desired national saving to fall.

Question

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The Answer of A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents.The country is currently running a capital and financial account deficit.The imposition of the capital controls will cause
A)net exports to increase.
B)real domestic interest rates to rise.
C)real world interest rates to fall.
D)desired national saving to fall.

A Large Country Imposes Capital Controls That Prohibit Foreign Borrowing