Chapter 8R, Problem 16MCQ

To determine

To find:

Reason for intervention of government to keep their value of their currency down.

Explanation of Solution

The topic of the inquiry is the phenomena of capital flows and how it affects the effectiveness of the economy. Capital influx and outflow are terms used to describe the flow of money into and out of an economy, respectively. Capital inflows are needed not just to close the current account gap, but also to foster productive investment and the expansion of domestic savings and investment.

Hence the correct option is C.