A speculative attack on a currency is triggered when:
A) the domestic inflation rate is higher than that of other trading partners
B) the central bank loses control over the domestic money supply
C) the currency is overvalued relative to what is warranted by the economic fundamentals
D) one big speculator starts the attack and small speculators follow

Question

Quizplus · Accepted Answer

A speculative attack is often triggered when a currency is perceived to be overvalued relative to economic fundamentals, leading speculators to bet against it.

A Speculative Attack on a Currency Is Triggered When