An advantage of an international lender of last resort is its ability to prevent ________, in which a successful speculative attack on one currency leads to attacks on others.

Question

Quizplus · Accepted Answer

An international lender of last resort can mitigate contagion effects in financial markets by providing a safety net to prevent a widespread crisis. Contagion occurs when a crisis in one country or currency spreads to others, leading to a domino effect of cascading defaults and financial instability.

An Advantage of an International Lender of Last Resort Is