The phenomenon of capital flight is most likely to occur when

Question

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Capital flight occurs when investors and wealthy individuals move their money out of a country due to economic or political instability, which includes hyperinflation. In such a situation, they fear that their assets may lose value or be subject to confiscation or currency devaluation. Hence, the value of domestic currency depreciates rapidly, which may lead to currency crisis, further economic instability, and a cycle of capital flight.

The Phenomenon of Capital Flight Is Most Likely to Occur