#1
What is capital flight?
The movement of airplanes carrying money
The illegal export of currency
The rapid outflow of assets and money from a country
The movement of capital within a country
#2
Which of the following is NOT a cause of capital flight?
Political instability
Economic uncertainty
Stringent capital controls
Stable financial markets
#3
Which of the following is NOT a factor contributing to capital flight?
Corruption
Tax incentives
Economic reforms
Sound fiscal policies
#4
What are the main consequences of capital flight?
Increased foreign investment
Currency devaluation and economic instability
Strengthening of domestic industries
Reduction in unemployment rates
#5
Which of the following measures can governments use to control capital flight?
Imposing currency exchange restrictions
Implementing expansionary monetary policies
Encouraging free movement of capital
Reducing interest rates
#6
Which of the following is a potential consequence of prolonged capital flight?
Increased government revenue
Stagnant economic growth
Lower inflation rates
Improved balance of trade
#7
What distinguishes capital flight from normal capital outflows?
Capital flight is always legal
Capital flight is always related to political instability
Capital flight involves sudden, large-scale movements of capital
Capital flight is a term synonymous with foreign direct investment
#8
In which sector does capital flight pose the greatest risk?
Banking and finance
Manufacturing
Agriculture
Healthcare
#9
Which of the following statements best describes the impact of capital flight on exchange rates?
Capital flight leads to appreciation of the domestic currency
Capital flight leads to depreciation of the domestic currency
Capital flight has no impact on exchange rates
Capital flight stabilizes exchange rates
#10
Which economic indicator can be affected by capital flight?
Gross Domestic Product (GDP)
Consumer Price Index (CPI)
Human Development Index (HDI)
Gender Inequality Index (GII)
#11
What role does international cooperation play in addressing capital flight?
It can exacerbate capital flight
It has no impact on capital flight
It can help mitigate capital flight through information sharing and policy coordination
It accelerates capital flight
#12
What is the 'flight to safety' phenomenon associated with capital flight?
Investors fleeing to countries with stable political and economic conditions
Investors moving assets from safe to risky markets
Governments encouraging capital flight for economic stability
The practice of concealing capital to avoid taxation
#13
What is the relationship between capital flight and sovereign debt?
Capital flight reduces sovereign debt
Capital flight increases sovereign debt
Capital flight has no impact on sovereign debt
Capital flight is a form of sovereign debt
#14
In what ways can capital flight impact a country's fiscal policy?
By promoting government spending
By reducing government revenues
By increasing government borrowing
By improving government credit ratings
#15
Which economic theory best explains the occurrence of capital flight?
Classical economics
Keynesian economics
Monetarist economics
Neoclassical economics
#16
What is the 'fear of expropriation' motive for capital flight?
Fear of losing political power
Fear of losing social status
Fear of government seizing assets
Fear of currency devaluation
#17
What role do exchange rate regimes play in influencing capital flight?
They have no impact on capital flight
Fixed exchange rate regimes encourage capital flight
Flexible exchange rate regimes encourage capital flight
Fixed exchange rate regimes discourage capital flight