Which of the following is a feature of the capital account convertibility?
A. Only export-related convertibility
B. Freedom to convert local financial assets into foreign financial assets and vice versa
C. Complete ban on capital flows
D. Freedom to convert local currency into foreign currency for current account transactions only
Answer: Option B
Solution (By JKSSB Mock Tests)
Capital account convertibility allows residents and non-residents to convert local currency into foreign currency and transfer capital freely for investment and other capital transactions.
Explanation:
Consumer equilibrium occurs at the point where the budget line is tangent to an indifference curve, equating the marginal rate of substitution with the price ratio.
Explanation:
The stage of diminishing returns starts when the marginal product of the variable factor begins to decline, although it may still be positive.
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