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How can the government prevent speculators from rushing into and out of the country's market and disrupting its economy?

a. Using capital controls
b. Using a quota
c. Stopping money laundering
d. All of the above

User Shealan
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1 Answer

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Final answer:

To prevent economic disruption from speculators, governments can use capital controls, quotas, and stop money laundering, with all three methods contributing to stabilizing the economy. d. All of the above

Step-by-step explanation:

The government can prevent speculators from rushing into and out of a country's market and causing economic disruption by using capital controls. Capital controls are regulatory measures used to limit the flow of foreign capital into and out of the domestic economy. They can take the form of taxes on financial transactions, restrictions on the purchase of domestic assets by foreigners, or limits on the amount of money that domestic investors can take abroad.

Other methods, such as using quotas, can also help to regulate the amount and type of foreign investment that is allowed in the country. Additionally, governments work to stop money laundering, which can help stabilize the financial system by preventing illicit funds from flowing into and out of the country's markets.

Each of these methods contributes differently to stabilizing the economy and protecting against the risks posed by speculative investment. Therefore, the correct answer to the question is d. All of the above.

User Andypaxo
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