An Advantage of an International Lender of Last Resort Is

question 67

Multiple Choice

An advantage of an international lender of last resort is its ability to prevent ________,in which a successful speculative attack on one currency leads to attacks on others; its disadvantage is the problem of ________ if creditors expect to be protected if a crisis occurs.

• A) contagion; moral hazard
• B) contagion; adverse selection
• C) currency virus; moral hazard
• D) currency virus; adverse selection