Describe the concept of capital flight and its potential consequences for a country's economy and financial stability. A) Capital flight refers to the movement of goods and services across international borders, which has no impact on an economy. B) Capital flight involves the rapid outflow of investment and financial assets from a country, potentially leading to a currency crisis, economic instability, and a weakening of the country's financial system. C) Capital flight is a government policy to attract foreign investments. D) Capital flight has no relevance to a country's economy or financial stability.

Describe the concept of capital flight and its potential consequences for a country's economy and financial stability. A) Capital flight refers to the movement of goods and services across international borders, which has no impact on an economy. B) Capital flight involves the rapid outflow of investment and financial assets from a country, potentially leading to a currency crisis, economic instability, and a weakening of the country's financial system. C) Capital flight is a government policy to attract foreign investments. D) Capital flight has no relevance to a country's economy or financial stability.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter7: Economic Growth: Theory And Policy

Section: Chapter Questions

Problem 3DQ

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