Speculative attacks:

Question

Quizplus · Accepted Answer

Speculative attacks can be triggered even when domestic policymakers are acting responsibly. This can happen due to various external factors, such as changes in global market conditions or shifts in investor sentiment. While responsible fiscal policies can mitigate the risks of speculative attacks, they cannot guarantee immunity against them. Additionally, central banks may not always be able to stop speculative attacks if they have limited resources or if the attack is particularly severe. Finally, speculative attacks are not necessarily illegal, and speculators may not be fined if they operate within legal bounds.

Speculative Attacks