In most of the financial crises during the 1990s, the countries
A) owed substantial short-term debt to foreigners.
B) had just converted from communism.
C) did not borrow enough from the World Bank.
D) were overthrowing dictators.
E) had converted short-term debt to long-term debt.

Question

Quizplus · Accepted Answer

Most of the financial crises during the 1990s occurred in countries that owed substantial short-term debt to foreigners. These short-term loans were often used to finance current account deficits and were subject to sudden withdrawal by foreign investors, leading to liquidity crises in these countries.

In Most of the Financial Crises During the 1990s, the Countries