Final answer:
An example of a capital outflow control is d. All of the answers given, which include Mexico limiting U.S. dollars coming in, excluding foreigners from purchasing short-term debt, and limiting pesos leaving the country. These measures aim to protect the economy from sudden capital flight.
Step-by-step explanation:
Which of the following would be an example of a capital outflow control? The answer is d. All of the answers given would be examples of capital outflow controls. This encompasses actions taken by a country to limit or control the flow of financial resources out of the economy:
- (a) Limiting the amount of foreign currency, such as U.S. dollars, that can be brought into the country restricts how much domestic currency may leave the economy.
- (b) Excluding foreigners from purchasing short-term debt prevents the quick withdrawal of funds by foreign investors.
- (c) Placing a cap on the amount of domestic currency, pesos in the case of Mexico, that citizens can take out of the country directly controls capital flight.
These measures help protect the economy from the potential negative impacts of sudden capital flight and are often controversial because they can limit the freedom of capital movement.