Which of the following is a feature of the capital account convertibility?
A. Freedom to convert local currency into foreign currency for current account transactions only
B. Freedom to convert local financial assets into foreign financial assets and vice versa
C. Complete ban on capital flows
D. Only export-related convertibility
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:
Capital-account liberalisation refers to the reduction or elimination of legal barriers to the free movement of capital across national borders.
Explanation:
The interaction between the multiplier and accelerator is used in theories of business cycles (e.g., by Samuelson and Hicks) to explain fluctuations in economic activity.
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