To better advise the firms clients on the likelihood of currency crises, Kwan tries to formulate an early warning system for these episodes. She recognizes that a typical currency crisis tends to be triggered by a number of economic problems, not just one.

3.) Kwans early warning system is least likely to indicate an impending crisis when there is:

A. an expansionary monetary policy.

B. an overly appreciated real exchange rate.

C. rising foreign exchange reserves at the central bank.