When Carry Trade Speculation Grows to High Levels, It Can

question 77

Multiple Choice

When carry trade speculation grows to high levels, it can affect the economy. How?

• A) It is a stabilizing factor.
• B) It can be a destabilizing factor, causing large swings in exchange rates.
• C) It creates large differentials in income distribution in emerging markets.
• D) Inflation is always a problem when carry trade activity increases.

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