Destabilizing Speculation Is the Process Where

question 42

Multiple Choice

Destabilizing speculation is the process where

• A) In a free floating exchange system, speculators cause wide fluctuations to the exchange rate.
• B) In a fixed peg exchange system, speculators hold foreign reserves too long and destabilize the peg.
• C) In a free floating exchange system, the International Monetary Fund is forced to issue Special Drawing Rights.
• D) In a fixed peg exchange system, speculators sell all holdings of Special Drawing Rights.

---

Definitions:

Break Norms

The act of violating established social rules, standards, or expectations in a particular context.

Free Floating

A state of being unattached or not committed to any particular course of action or thought, often allowing for greater adaptability.

Maypole

A traditional pole, often used in folk festivals, around which dances are performed; symbolically, it can refer to a central communication structure in group dynamics.

Group Think

A psychological phenomenon where the desire for group harmony or conformity results in irrational or dysfunctional decision-making outcomes.