When residents and nonresidents rush to convert their holdings of domestic currency into a foreign currency, the phenomenon is generally referred to as capital flight. true / false.

TRUE

Explanation:

Capital flight is an economic phenomenon that consists in observing the atypical movement of economic agents by exchanging one currency for another. This is a phenomenon that happens when in a country's crises, the expectations of economic agents become pessimistic and they demand another currency to withdraw their capital from the crisis country. For example, if Argentina is in a financial crisis, Americans who have invested in that country, whose currency is the Argentine peso, decide to sell their investments in that currency and return to the dollar. Also, Argentines themselves may have a poor perception of their currency and demand dollar as a safer source. The joint action of internal and external agents that demand the exchange of a currency is called capital flight.

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