The reason for the concurrence of exchange rate crises and other financial disruptions centers on:
A) the inherent instability of most banks in low-income nations.
B) the tendency of most elected officials to be susceptible to influence and corruption.
C) the fact that changes in exchange rates can raise debt burdens (denominated in other currencies) to intolerable levels.
D) the tendency of the current administration to react by nationalizing banks and implementing capital controls.

Question

Quizplus · Accepted Answer

Changes in exchange rates can significantly impact the value of debts denominated in other currencies, making it difficult for countries to repay their debts. This can lead to financial disruptions and, in some cases, exchange rate crises.

The Reason for the Concurrence of Exchange Rate Crises and Other