After a Speculative Attack Has Been Successful, and the Country

question 48

Multiple Choice

After a speculative attack has been successful, and the country is forced to devalue its currency, it is common to see many local business firms driven to bankruptcy.This most commonly occurs because _____.

• A)nobody ever wants to invest in a country that just suffered a devaluation
• B)many local firms had foreign loans (denominated in, say, dollars), and they cannot repay them at the new exchange rate
• C)the WTO forces troubled firms to show profits or make way for new, more efficient firms
• D)local firms cannot compete with their foreign competitors at the new prices after the devaluation
• E)many local firms do not know how to deal with the complicated financial operations involved in a speculative attack

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Definitions:

Sensory Memory

The shortest-term element of memory, it acts as a buffer for stimuli received through the senses, allowing a trace to be retained for a brief moment after the original stimulus has ceased.

Sensory Memory

The shortest-term element of memory, it is the ability to retain impressions of sensory information after the original stimuli have ended, acting as a buffer for incoming sensory information.

Long-Term Memory

A type of storage in the brain capable of holding information for long periods, from hours to a lifetime.

Primary Memory

Also known as short-term memory, it is the component of the mind responsible for the transient holding of information.