Weaknesses in the Asian Financial Systems in the Late 1990s

question 32

Multiple Choice

Weaknesses in the Asian financial systems in the late 1990s was caused by

• A) appreciating currencies and popping real estate bubbles.
• B) depreciating currencies and popping real estate bubbles.
• C) appreciating currencies and real estate booms.
• D) international debt-service difficulties began to generate domestic debt-servicing difficulties.
• E) foreign banks, which had loaned heavily to Asian banks, agreeing to continue to roll over existing loans.

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Definitions:

Fixed Costs

Expenses that do not change in the short term regardless of the level of production or sales, such as rent and salaries.

Average Total Cost Curve

A graph that shows the per unit cost of production at various levels of output.

Short-Run

A time period in which at least one factor of production is fixed, limiting the ability of firms to adjust to changes in market conditions fully.

Marginal Cost Curve

A graphical representation that shows the change in total cost when an additional unit is produced; typically upward-sloping due to increasing marginal costs.