Related to the Economics in Practice on page 717: In Indonesia, children and allies of President Suharto were affiliated with many companies. When Suharto unexpectedly fell ill, the stock prices of these companies dropped significantly, suggesting that
A) these companies thrived under President Suharto despite their connection with Suharto's allies and relatives.
B) later regimes in Indonesia will be more concerned about economic efficiency and less corrupt.
C) President Suharto's removal from power was based not only on illness but also on concern over corruption.
D) investor opinion of many of these firms was based on their connections with President Suharto and not the economic efficiency of those companies.

Question

Quizplus · Accepted Answer

The significant drop in stock prices of companies affiliated with children and allies of President Suharto when he fell ill suggests that investors' opinion of these firms was based on their connections with Suharto and not on their economic efficiency. This highlights the issue of corruption and cronyism in Indonesia during Suharto's regime.

Related to the Economics in Practice on Page 717: in Indonesia