When multiple countries attempt to boost their economies by lowering the value of their currencies, _______ occurs.
A) a financial crisis
B) competitive devaluation
C) a speculative attack
D) a fixed float

Question

Quizplus · Accepted Answer

When multiple countries attempt to boost their economies by lowering the value of their currencies, it leads to competitive devaluation, a situation where countries engage in a race to the bottom, trying to devalue their own currency to gain a competitive advantage in international trade. This can lead to currency wars and trade imbalances between countries.

When Multiple Countries Attempt to Boost Their Economies by Lowering