As the Asian financial crisis of 1997 began to spread, it became obvious to investors that Korean investments would provide lower returns than expected.What was the impact of such a realization on the foreign exchange market?

Question

Quizplus · Accepted Answer

When investors realized that Korean investments would provide lower returns than expected due to the Asian financial crisis, they began to look elsewhere for higher returns. This led to an increase in the demand for U.S. and other foreign assets, which in turn increased the demand for dollars and caused the price of the dollar in terms of Korean currency to increase. Therefore, D is the correct choice.

As the Asian Financial Crisis of 1997 Began to Spread