Question

residents of the hypothetical nation of jarna feared that the country's economy was failing. they rushed to convert their domestic currency into u.s. dollars and investors in businesses in jarna also converted their financial holdings. this mass conversion of currency is known as .

Answer 1

The mass conversion of currency is known as capital flight.

Capital flight is the widespread outflow of financial resources and money from a country as a result of factors like political or economic unrest, currency depreciation or the implementation of capital controls. Capital flight can be either legal—as when international investors return funds to their home nations—or illegal—as when countries impose capital controls that prevent the export of assets.

Poorer countries can suffer greatly as a result of capital flight because it hinders economic progress and may degrade living conditions. Contrary to popular belief, open economies are less susceptible to capital flight because investors are more confident in their long-term prospects as a result of transparency and openness.

To learn more about open economy see:

brainly.com/question/23160076

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