Th4.3: ^^ Capital Flight

Question 1

What is capital flight?

Answer 1

when large amounts of money are taken out of the country, rather than being left there for people to borrow and invest

Question 2

If money was placed in banks within the country…

Answer 2

then credit could be created by banks for consumers and businesses to spend

Question 3

Why can capital flight occur?

Answer 3

due to a lack of confidence in the country’s stability, to hide it from government authorities or simply for profit repatriation

Question 4

Why did capital flight cause?

Answer 4

the Argentine economic crisis in 2001