Which of the Following Happens When Governments Typically Impose Convertibility

question 96

Multiple Choice

Which of the following happens when governments typically impose convertibility restrictions on their currency out of the fear that free convertibility will lead to a run on their foreign exchange reserves?

• A)Deflation
• B)Stagflation
• C)Liquidity rush
• D)Capital flight

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Definitions:

Notice of Dishonor

A formal notification given to parties involved that a negotiable instrument, like a check, has been dishonored or refused for payment.

Big Bank

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Fiber Optic Cable

A Fiber Optic Cable is a network cable that contains strands of glass fibers inside an insulated casing, designed for long-distance, high-performance data networking and telecommunications.

Construction Worker

An individual employed in the physical construction of buildings and infrastructure projects.