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Business, 23.03.2020 21:29 kdlishs

The global financial crisis of 2007 - 2009 led some economists and policymakers to suggest the reinstitution of capital controls-or limits on the flow of foreign financial exchange and financial investments across countries-which existed in many European countries prior to the 1960s. Why would a financial crisis lead to a reconsideration of using capital controls?

A. With capital controls, governments can more easily regulate risky behavior in their home markets.
B. With the globalization of financial markets, a financial crisis in one country can rapidly spread the financial pain to others.
C. Strong capital controls make it possible to increase domestic savings, which funds additional investment and growth.
D. Capital controls ensure that there will not be domestic financial panic when there is an international crisis

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