What do capital controls prevent?

A. A cartel of producers from charging a higher-than-market price

agreed upon by all members.

B. The government from stopping the withdrawal of someone's

money from their own bank account.

C. Speculators from rushing into and out of a country's market and

disrupting its economy.

D. A bank's customers from demanding more money in withdrawals

than the bank has on hand.

Question

Business

Jake Walton

31 July, 11:55

What do capital controls prevent?

A. A cartel of producers from charging a higher-than-market price

agreed upon by all members.

B. The government from stopping the withdrawal of someone's

money from their own bank account.

C. Speculators from rushing into and out of a country's market and

disrupting its economy.

D. A bank's customers from demanding more money in withdrawals

than the bank has on hand.

+4

Answers (2)

Know the Answer?

Foley · Answer 1

What do capital controls prevent?

Speculators from rushing into and out of a country's market and

disrupting its economy.

Explanation:

Capital control entails when a body that regulates money in a country controls the cash inflow and outflow

Lucia · Answer 2

The answer is C. Speculators from rushing into and out of a country's market and disrupting its economy.

Explanation:

When speculating investors rushes money in and out of a country without considering the long term economic perspectives, this destabilise the equity prices and affect negatively to local and potential investors as well.

To prevent such disarrays in the market, the governments and regulatory bodies enforce capital control mechanics. So that the smooth flow of investing capitals is ensured.