Define economic incentives

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Reference no: EM131485313

Question: Many less-developed countries suffer at times from "capital flight," as individuals with sufficient income, banks, and large companies convert their domestic assets into foreign currencies. They typically do this to invest or deposit these foreign currencies abroad, usually to escape high inflation, devaluations, and unstable domestic economic, political, and social conditions. What effect does the return of capital flight money to less-developed countries have on exchange rates? Show using a graph. What economic incentives might countries provide to encourage the return of flight capital money and why should they do so?

Reference no: EM131485313

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