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General Knowledge · Q496

Practice

Competitive Exams · General Knowledge · question 496

Q496

The term used to describe many that flows into a country to take advantage of high rates of interest is called

A.
hot money
Answer
B.
hard sector
C.
hard currency
D.
None of the above

Answer: Option A

Solution

Answer: Option A
Solution:
The term used to describe many that flows into a country to take advantage of high rates of interest is called hot money. Hot money is the flow of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts. These speculative capital flows are called 'hot money' because they can move very quickly in and out of markets, potentially leading to market instability.