Exchange rate crises:
A) are extremely rare.
B) are related to political crises.
C) typically occur in every nation several times each year.
D) are fairly common.

Question

Quizplus · Accepted Answer

Exchange rate crises are fairly common and have occurred in multiple countries throughout history. These crises often result from macroeconomic imbalances, such as high inflation, current account deficits, and excessive government borrowing, which can lead to a loss of confidence in a country's currency. Political instability can also contribute to exchange rate crises, but it is not always the sole cause.

Exchange Rate Crises