Asked by Sandra Belgarde on Jun 17, 2024
Verified
Capital tends to flow into markets earning short-run profits and out of markets suffering short-term losses.
Capital Flows
The transfer of funds to support trade, investment, or business activities, domestically or across borders.
Short-run Profits
The profit earned by a firm during a period where at least one input is fixed, typically analyzed to understand performance without long-term adjustments.
- Comprehend the significance of capital transfers within markets and their impact on the economic health and balance of industries.
Verified Answer
SK
Sivakrishna KolliJun 21, 2024
Final Answer :
True
Explanation :
Capital mobility is driven by the search for higher returns, so investors often move their resources into markets where they perceive the potential for short-run profits and withdraw from those experiencing short-term losses to minimize their risk and maximize their returns.
Learning Objectives
- Comprehend the significance of capital transfers within markets and their impact on the economic health and balance of industries.