A _____ occurs when a speculative attack on the exchange value of a currency results in a sharp depreciation in the value of the currency or forces authorities to expend large volumes of international currency reserves and sharply increase interest rates to defend the prevailing exchange rate.
A)fiscal disruption
B)solvency crisis
C)banking crisis
D)currency crisis

Question

Quizplus · Accepted Answer

A currency crisis occurs when a speculative attack on the exchange value of a currency results in a sharp depreciation in the value of the currency or forces authorities to expend large volumes of international currency reserves and sharply increase interest rates to defend the prevailing exchange rate.

A _____ Occurs When a Speculative Attack on the Exchange