What Is a Speculative Attack on a Currency

question 31

Multiple Choice

What is a speculative attack on a currency?

• A)National governments decide to engage in competitive devaluations against a given country.
• B)International organizations such as the WTO and the IMF attempt to reorder the currency's system.
• C)Private investors sell domestic currency and buy foreign currency, betting that the domestic currency will soon be devaluated.
• D)Casinos in Las Vegas allow the proliferation of bets for and against a given currency.
• E)A country is at war, and the enemy country "freezes" all the accounts denominated in the local currency.

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Definitions:

Vital Activities

Essential processes or actions necessary for the maintenance of life, including breathing, feeding, digestion, and reproduction among organisms.

Autonomic Nervous System

The part of the nervous system responsible for controlling bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.

Nerve Fibers

Extended fibers of neurons that conduct electrical signals across the body.

Axons

Long, threadlike parts of a nerve cell along which impulses are conducted from the cell body to other cells.