Author Question: As the Asian financial crisis of 1997 began to spread, it became obvious to investors that Korean ... (Read 104 times)

cherise1989 · **on:** Jun 30, 2018

As the Asian financial crisis of 1997 began to spread, it became obvious to investors that Korean investments would provide lower returns than expected. What was the impact of such a realization on the foreign exchange market?
a. The supply of Korean won decreased as people tried to withdraw their Korean investments.
b. The price of dollar in terms of Korean currency decreased as people invested more in U.S. assets.
c. The demand for dollars decreased as investors realized that there is a worldwide crisis going on.
d. The demand for dollars increased as investors put their money in U.S. and other foreign assets.
e. The demand for Korean won increased as investors decided to invest in Korean assets.

Question 2

If there are significant external costs associated with the production of a product, it can be said that the private cost of production to the firm ____ the cost to society associated with this product and output should ____ to move toward the efficient situation.
a. overstates; increase
b. understates; increase
c. overstates; decrease
d. understates; decrease