Bizland is a fast growing emerging economy. In the recent years, investors from many countries are keen to invest in Bizland and so the country has seen large amounts of capital inflow. What can be the advantages of these capital inflows? What can be some possible disadvantages of this free movement of large capital inflows? Explain, with example. What can the Central bank and Government of Bizland do to ensure that the potential risks can be minimized?

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Capital inflows can bring several advantages to an emerging economy like Bizland Advantages Economic Growth Large capital inflows can stimulate econom... View the full answer