In Mozambique a currency crisis led the government to mandate that citizens from Mozambique could only spend up to $13,600 on their credit o

Question

In Mozambique a currency crisis led the government to mandate that citizens from Mozambique could only spend up to $13,600 on their credit or debit cards when shopping abroad. This is an example of a(n)__________.

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Harper 3 months 2022-02-09T06:04:08+00:00 1 Answer 0 views 0

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    2022-02-09T06:05:51+00:00

    Answer:

    In Mozambique a currency crisis led the government to mandate that citizens from Mozambique could only spend up to $13,600 on their credit or debit cards when shopping abroad. This is an example of a(n) ______________.

    A. import tariff

    B. quota

    C. self-reference criterion

    D. embargo

    E. exchange control

    The correct answer is E. exchange control

    Step-by-step explanation:

    Exchange controls are government imposed controls on the selling, buying or transfer of foreign currencies by residents of the country and on the selling and buying of the country’s local currency by nonresidents, as well as control of cross border currency transfer.

    Exchange contrl is meant for in-country economic management to prevent exchange rate volatility and is common in countries with developing economies.

    Generally types of exchange controls are as follows:

    1.  Allowing foreign exchange transaction through only government approved channels

    2. Placing a ban on the possession of foreign currency

    3. Placing a ban on the use of foreign currency within the country

    4. setting fixed exchange rates

    5. Placing a restriction on the amount of currency flow across border

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