What two key factors trigger speculative attacks leading to currency cries in emerging market countries?
What will be an ideal response?
The deterioration in bank balance sheets and severe fiscal imbalances are the key factors. To counter a speculative attack, a country might try to raise interest rates. Raising interest rates, however, would worsen the problem of banks that are already in trouble. Speculators recognize this and seize the opportunity. When their are severe fiscal imbalances, there is concern that government debt will not be paid back. Funds are pulled out of the country and domestic currency is sold leading to a decline in the value of the domestic currency. Speculators will once again seize the opportunity.
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A. 5 B. 3 C. 2 D. 1
Proponents of the estate and gift tax argue that the tax is necessary because
A) it generates a large portion of total federal revenue. B) it prevents "unfair" accumulation of wealth across generations. C) it is the primary source of funding for Medicare and Medicaid. D) it is only applied to items that have not previously been taxed.
Which of the following was a reason that the Federal Reserve took on additional risks associated with unconventional policy during the recession of 2007-2009?
a. The inflated price of Treasury bills made them too expensive to purchase in open market operations. b. The large budget deficit constrained conventional monetary policy. c. The U.S. Treasury was unable to sell Treasury bills in the primary market. d. The Fed was able to act more quickly than Congress.
As compared to production alternative D, the choice of alternative C would:
What will be an ideal response?