A capital ________ can promote financial instability in an emerging-market country because it is what forces a country to ________ its currency.

Question

Quizplus · Accepted Answer

A capital outflow can promote financial instability in an emerging-market country because it represents a withdrawal of investment, leading to a decrease in the value of the country's currency. This often forces the country to devalue its currency to make its exports more competitive and stabilize the economy.

A Capital ________ Can Promote Financial Instability in an Emerging-Market