Capital flight is a phenomenon in which a large number of individuals and companies exchange _____.
A) domestic goods for gold
B) gold for domestic goods
C) foreign currency for a domestic currency
D) domestic currency for a foreign currency

Question

Capital flight is a phenomenon in which a large number of individuals and companies exchange _____.
A) domestic goods for gold 
B) gold for domestic goods 
C) foreign currency for a domestic currency 
D) domestic currency for a foreign currency

Quizplus · Accepted Answer

Capital flight occurs when individuals and companies sell domestic currency to purchase foreign currency, often due to economic instability, political uncertainty, or unfavorable investment conditions in their home country. This movement of capital can lead to a decrease in the value of the domestic currency and negatively impact the economy.

Capital Flight Is a Phenomenon in Which a Large Number