All of the following EXCEPT one would have a strong propensity to initiate a financial crisis. Which is the exception?
A) increases in uncertainty
B) increases in interest rates
C) balance sheet deterioration
D) exchange rate appreciation

Question

Quizplus · Accepted Answer

Exchange rate appreciation typically strengthens a country's currency value relative to others, which can make imports cheaper and reduce the burden of foreign debt, potentially reducing the likelihood of a financial crisis. In contrast, increases in uncertainty, interest rates, and balance sheet deterioration are all factors that can contribute to financial instability.

All of the Following EXCEPT One Would Have a Strong