The Phenomenon of _____ Occurs When Residents and Nonresidents of a Country

question 41

Multiple Choice

The phenomenon of _____ occurs when residents and nonresidents of a country rush to convert their holdings of domestic currency into a foreign currency.

• A) deflation
• B) arbitrage
• C) liquidity rush
• D) capital flight
• E) currency swap

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Definitions:

Seasonal Fluctuations

Variations in sales, inventory levels, or business activity that regularly occur at certain times of the year due to seasons.

Corporate Bonds

Debt securities issued by corporations to fund capital improvements, expansions, or other business needs.

Idle Cash

Cash that is not currently invested or used in transactions, often earning minimal or no interest.

Cash Management

Cash management is the process of collecting, managing, and investing a company's cash flow in order to meet its operational expenses and maintain liquidity.