The Currency Depreciations and the Recessions During the Asian Crisis

question 33

Multiple Choice

The currency depreciations and the recessions during the Asian crisis did lead to improvement in the Asian countries' current account balances, largely through:

• A)increases in exports.
• B)decreases in capital outflows.
• C)decreases in imports.
• D)increases in the rate of inflation in these countries.

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Definitions:

Excess Capacity

A situation where a firm is operating below its maximum production capability and can produce more with the existing resources.

Physical And Human Capital

Assets including machinery, buildings (physical capital) and the skills, knowledge, and experience possessed by an individual or population (human capital).

Excess Capacity

A situation where a firm is producing at a lower scale of output than it has been built to handle, due to insufficient demand.

Product Diversity

The variety of different items within a particular category available to consumers in the market.