The "Asian crisis" of 1997-1998 importantly involved movement of short-term financial Capital __________ countries such as Thailand and Malaysia, with a consequent __________ of their currencies, which in turn caused __________ in the trade balances of other countries of the world.

Question

Quizplus · Accepted Answer

The movement of short-term financial capital out of countries like Thailand and Malaysia caused a depreciation of their currencies. This led to a deterioration in the trade balances of other countries around the world. Option A is incorrect because it suggests an improvement in trade balances, which contradicts the situation described in the question. Option B is incorrect because it suggests an appreciation of currencies, which is not what happened in the Asian crisis. Option D is incorrect because it suggests movement of capital into the countries, which is not what happened in the crisis.

The "Asian Crisis" of 1997-1998 Importantly Involved Movement of Short-Term