Which of the following has been a consequence of deregulation of financial markets?
(A) An increase in the use of fixed exchange rates
(B) An increase in foreign direct investment
(C) Greater influence of trading blocs
(D) Increased mobility within international labour markets - HSC - SSCE Business Studies - Question 14 - 2001 - Paper 1
Question 14
Which of the following has been a consequence of deregulation of financial markets?
(A) An increase in the use of fixed exchange rates
(B) An increase in foreign d... show full transcript
Worked Solution & Example Answer:Which of the following has been a consequence of deregulation of financial markets?
(A) An increase in the use of fixed exchange rates
(B) An increase in foreign direct investment
(C) Greater influence of trading blocs
(D) Increased mobility within international labour markets - HSC - SSCE Business Studies - Question 14 - 2001 - Paper 1
Step 1
An increase in the use of fixed exchange rates
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Answer
This option is incorrect as deregulation typically leads to more flexible exchange rate systems rather than fixed rates.
Step 2
An increase in foreign direct investment
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Answer
This option is correct. Deregulation of financial markets often encourages foreign direct investment by making it easier for companies to invest across borders due to less restrictive regulations.
Step 3
Greater influence of trading blocs
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Answer
While trading blocs may gain influence, this is not a direct consequence of financial market deregulation.
Step 4
Increased mobility within international labour markets
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Answer
While deregulation can influence labor mobility, it is more directly tied to other factors such as trade agreements rather than just the deregulation of financial markets.
