Multiple Choice
For a developing country, a _____ can foster economic instability because it can result in a lending boom and ______ by banks, which promotes a financial crisis.
A) capital inflow, excessive risk taking
B) capital inflow, inadequate risk taking
C) capital outflow, excessive risk taking
D) capital outflow, inadequate risk taking
Correct Answer:

Verified
Correct Answer:
Verified
Q138: Other things equal, under managed floating exchange
Q139: With fixed exchange rates, assume that the
Q140: Most nations currently allow their currencies' exchange
Q141: By adopting a currency board, a developing
Q142: Under a floating exchange rate system, other
Q144: For Ecuador, an advantage of adopting the
Q145: Suppose that Japan maintains a pegged exchange
Q146: An argument can be made for controls
Q147: With a system of fixed exchange rates,
Q148: Under managed floating exchange rates, central bank