The transfer of savings from developing countries to industrially advanced countries to avoid govt. expropriation, taxation and high rates of inflation is_________________?
Correct answer: A. capital flight
- A. capital flight
- B. capital account
- C. capital deficit
- D. All of these
Explanation
Capital flight is the movement of savings or financial capital out of a country because investors fear expropriation, heavy taxation, inflation, or political instability. A capital account records transactions, but it is not the transfer itself.
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