Based on the 1997 Crisis and your own experience, what are the ...

[bobbysung]

Based on the 1997 Crisis and your own experience, what are the main weaknesses of the East Asian economies?
 
  What will be an ideal response?

Question 2

Fiscal expansion
 
  A) stimulates aggregate demand and causes output to decline.
  B) decreases aggregate demand and causes output to decline.
  C) stimulates aggregate demand and causes output to rise.
  D) decreases aggregate demand and causes output to rise.
  E) decreases government expenditures.

[soda0602]

Answer to Question 1

The textbook raised mainly three issues. The first weakness is little productivity increase, most of the growth due to capital and labor inputs increase, eventually leading to diminishing returns. The second weakness is the poor state of banking regulation in most of the Asian economies. The third reason is inadequate legal framework for dealing with companies in trouble.

Answer to Question 2

C