A technique for implementing industrial policies that probably worsened the effects of the 1997 crisis was
A)directed credit.
B)protection from imports.
C)export subsidies.
D)research subsidies.
E)quotas.

Question

Quizplus · Accepted Answer

Directed credit, which involves the government requiring banks to lend to certain industries or sectors, can lead to misallocation of resources and the creation of bubble-like conditions. In South Korea, directed credit was a major factor in the buildup of bad loans and excess capacity in the chaebol, or family-owned conglomerates, which were at the center of the 1997 crisis.

A Technique for Implementing Industrial Policies That Probably Worsened the Effects