The Two Key Factors That Trigger Speculative Attacks on Emerging

question 10

Multiple Choice

The two key factors that trigger speculative attacks on emerging market currencies are

• A)deterioration in bank balance sheets and severe fiscal imbalances.
• B)deterioration in bank balance sheets and low interest rates abroad.
• C)low interest rates abroad and severe fiscal imbalances.
• D)low interest rates abroad and rising asset prices.

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Definitions:

Behavioural Impulses

Behavioural impulses are spontaneous urges to act in certain ways, often without conscious deliberation, driven by psychological or physiological needs.

Conflict

A situation or process that involves opposing actions or viewpoints, leading to a state of tension or disagreement.

Pressure

The application of force upon a surface by an object, fluid, etc., in contact with it or the stress or urgency of matters demanding attention.

Principal Types

Main or leading categories or kinds within a larger group or system.