In 1997, there was a speculative attack on the Thai baht. This resulted from the:
A. belief by speculators that the Thai central bank didn't have sufficient U.S. dollar reserves to maintain the current fixed rate.
B. revelation that the Thai central bank had converted its gold reserves into foreign exchange.
C. belief by speculators that the Thai central bank had an oversupply of U.S. dollar reserves.
D. overthrow of the Thai president and the central bank.
Answer: A
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What is destabilizing speculation? What role did it play in the collapse of the Bretton Woods system?
What will be an ideal response?
Use the information provided in Table 7.2 below to answer the question(s) that follow.
Table 7.2Inputs Required to Produce a Product Using Alternative Technologies
Refer to Table 7.2. If the hourly wage rate is $10 and the hourly price of capital is $50, which production technology should be selected?
A. A B. B C. C D. D