Question
Foreign funds that can move very quickly in and out of
markets, potentially leading to market instability, are called?Solution
In economics, 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.
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