A change in investors' perceptions that make a fixed exchange rate untenable is known as:
A) a speculative attack.
B) dollarization.
C) seigniorage.
D) a floating currency board.

Question

Quizplus · Accepted Answer

A change in investors' perceptions that make a fixed exchange rate untenable is known as a speculative attack. This occurs when investors lose confidence in a country's ability to maintain a fixed exchange rate and begin to sell off its currency, leading to a rapid depreciation in its value.

A Change in Investors' Perceptions That Make a Fixed Exchange