Question

How does movement of capital across countries impact companies?

• A. Companies can pay their international suppliers in any currency.
• B. Companies can maintain a reserve of foreign currencies that can be used for business operations.
• C. The value of domestic currency will reduce, making exports cheaper.
• D. Companies can increase the production of goods and services that they sell around the world.

Answer 1

The correct option is D Companies can increase the production of goods and services that they sell around the world.

Due to globalization, capital like land, building, etc. flow from one country to another. With this capital, producers can invest in capital goods and increase production of goods and services, which they export to other countries.