Which of the following occurs when residents and nonresidents of a country rush to convert their holdings of domestic currency into a foreign currency?

Question

Quizplus · Accepted Answer

Capital flight refers to the situation when residents and nonresidents rush to convert their holdings of domestic currency into a foreign currency. It is most likely to occur when the value of the domestic currency is depreciating rapidly because of hyperinflation or when a country's economic prospects are shaky in other respects.

Which of the Following Occurs When Residents and Nonresidents of a Country