A Recent Phenomenon Is the Tendency of Emerging Market Economies

question 117

Essay

A recent phenomenon is the tendency of emerging market economies to accumulate excess foreign currency reserves so that their backing ratios exceed 100%. What possible reasons could explain this activity? Is it a sound economic policy? Why or why not?

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Definitions:

Experienced Abuse

Having been subjected to harmful or injurious treatment or behavior, often repeatedly or over a period of time.

Physical Abuse

The intentional use of force against someone, causing harm or injury.

Sexual Abuse

Any unwanted sexual activity, with perpetrators using force, making threats or taking advantage of victims not able to give consent.

Motivated Forgetting

A psychological theory suggesting individuals may unconsciously forget memories that cause stress or anxiety.