A fixed exchange rate system crisis may be accompanied by losses of internationa

Question

A fixed exchange rate system crisis may be accompanied by losses of international reserves. revaluation of a currency. falls of domestic interest rates. gains in comparative advantage. All of the following involve a moral hazard problem except an individual driving carelessly after buying a comprehensive insurance policy for a car. the IMF bailing Mexico out of a financial crisis, with promises to do the same for other nations that might face financial problems. making regular visits to your doctor because you know that you have full healthcare coverage. the requirement of banking institutions that owners invest a substantial portion of their own capital in their bank. Which of the following is a macroeconomic factor that caused the financial crisis in the Easy Asian currency crisis of 1997? Global saving and investment imbalances Financial market innovation Deeper levels of integration across financial markets Challenges and failures in financial regulation

Explanation / Answer

4)losses of international reserves

5) making regular visit to your doctor...

6)global saving and investment imbalances

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