A concerted effort by financial market speculators to profit by selling a nation-s currency and forcing policymakers to abandon the foreign exchange regime is called structural moral hazard.

Question

Quizplus · Accepted Answer

Structural moral hazard refers to a situation where market participants take excessive risks because they rely on implicit guarantees from policymakers. The described scenario is actually an example of a speculative attack or a currency crisis.

A Concerted Effort by Financial Market Speculators to Profit by Selling