Destabilizing speculation is the process where
A) In a free floating exchange system, speculators cause wide fluctuations to the exchange rate.
B) In a fixed peg exchange system, speculators hold foreign reserves too long and destabilize the peg.
C) In a free floating exchange system, the International Monetary Fund is forced to issue Special Drawing Rights.
D) In a fixed peg exchange system, speculators sell all holdings of Special Drawing Rights.
Correct Answer:
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