A sharp increase in net capital outflow that occurs when asset holders lose confidence in an economy is called:
A)contagion.
B)capital flight.
C)a credit crunch.
D)an asset-price bubble.

Question

Quizplus · Accepted Answer

Capital flight refers to a rapid outflow of assets from an economy due to a loss of confidence by investors and asset holders. This can occur when there are concerns about political instability, economic instability, or government policies that may negatively impact the value of investments. Contagion refers to the spread of economic or financial shocks from one country or region to another. A credit crunch is a sudden reduction in the availability of credit, often caused by a financial crisis. An asset-price bubble refers to a situation where the prices of certain assets, such as housing or stocks, rise well above their fundamental values, before eventually collapsing.

A Sharp Increase in Net Capital Outflow That Occurs When