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What kind of Financial Policy was successful in several Asian countries in promoting economic growth? O Market interest rates and profit margins directed investment to the short term projects with the highest returns, which were usually resource extraction ventures. O Government spending was used to fill in gaps in investment spending, directing capital towards the projects with the highest return on investment. O High interest rates attracted foreign direct investment, bringing in multinational corporations which established a local presence and provided jobs. O Capital controls allowed the country to maintain low interest rates without money going to overseas investments with higher returns, which encouraged long-term investments.

What kind of Financial Policy was successful in several Asian countries in promoting economic growth? O Market interest rates and profit margins directed investment to the short term projects with the highest returns, which were usually resource extraction ventures. O Government spending was used to fill in gaps in investment spending, directing capital towards the projects with the highest return on investment. O High interest rates attracted foreign direct investment, bringing in multinational corporations which established a local presence and provided jobs. O Capital controls allowed the country to maintain low interest rates without money going to overseas investments with higher returns, which encouraged long-term investments.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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### Successful Financial Policies in Promoting Economic Growth in Asian Countries **Question:** What kind of Financial Policy was successful in several Asian countries in promoting economic growth? 1. **Market interest rates and profit margins directed investment to the short term projects with the highest returns, which were usually resource extraction ventures.** - This policy focuses on attracting investments based on market-driven interest rates and profit margins, emphasizing short-term, high-return projects, particularly in resource extraction. 2. **Government spending was used to fill in gaps in investment spending, directing capital towards the projects with the highest return on investment.** - This approach involves the government playing an active role in economic planning by allocating spending to bridge investment gaps, thus prioritizing projects that promise the highest returns. 3. **High interest rates attracted foreign direct investment, bringing in multinational corporations which established a local presence and provided jobs.** - Here, the strategy leverages high interest rates to draw foreign direct investments (FDI), thereby attracting multinational corporations that establish local operations and generate employment. 4. **Capital controls allowed the country to maintain low interest rates without money going to overseas investments with higher returns, which encouraged long-term investments.** - This policy employs capital controls to prevent the outflow of money to higher-return overseas investments. By keeping interest rates low, the policy fosters an environment conducive for long-term domestic investments. ### Analysis: The question delves into the effectiveness of various financial policies leveraged by Asian countries to spur economic development. Each option outlines a different strategy, emphasizing the nuanced approaches to financial policy that can influence economic outcomes. - **Market Interest Rates Approach:** Emphasizes profit from short-term, high-yield projects. Effective in sectors like resource extraction. - **Government Spending Strategy:** Targets public investment to stimulate high-return projects, bridging private sector investment gaps. - **High Interest Rates for FDI:** Attracts foreign capital by appealing to international investors, promoting job creation and local business setups. - **Capital Controls for Domestic Investment:** Prevents financial outflows to foreign investments, maintaining low domestic interest rates to support long-term investment. Understanding the regional application and success of these policies provides valuable insight into the economic frameworks that drive growth in emerging markets.
Transcribed Image Text:### Successful Financial Policies in Promoting Economic Growth in Asian Countries **Question:** What kind of Financial Policy was successful in several Asian countries in promoting economic growth? 1. **Market interest rates and profit margins directed investment to the short term projects with the highest returns, which were usually resource extraction ventures.** - This policy focuses on attracting investments based on market-driven interest rates and profit margins, emphasizing short-term, high-return projects, particularly in resource extraction. 2. **Government spending was used to fill in gaps in investment spending, directing capital towards the projects with the highest return on investment.** - This approach involves the government playing an active role in economic planning by allocating spending to bridge investment gaps, thus prioritizing projects that promise the highest returns. 3. **High interest rates attracted foreign direct investment, bringing in multinational corporations which established a local presence and provided jobs.** - Here, the strategy leverages high interest rates to draw foreign direct investments (FDI), thereby attracting multinational corporations that establish local operations and generate employment. 4. **Capital controls allowed the country to maintain low interest rates without money going to overseas investments with higher returns, which encouraged long-term investments.** - This policy employs capital controls to prevent the outflow of money to higher-return overseas investments. By keeping interest rates low, the policy fosters an environment conducive for long-term domestic investments. ### Analysis: The question delves into the effectiveness of various financial policies leveraged by Asian countries to spur economic development. Each option outlines a different strategy, emphasizing the nuanced approaches to financial policy that can influence economic outcomes. - **Market Interest Rates Approach:** Emphasizes profit from short-term, high-yield projects. Effective in sectors like resource extraction. - **Government Spending Strategy:** Targets public investment to stimulate high-return projects, bridging private sector investment gaps. - **High Interest Rates for FDI:** Attracts foreign capital by appealing to international investors, promoting job creation and local business setups. - **Capital Controls for Domestic Investment:** Prevents financial outflows to foreign investments, maintaining low domestic interest rates to support long-term investment. Understanding the regional application and success of these policies provides valuable insight into the economic frameworks that drive growth in emerging markets.
### Question: Which factor can explain the economic differences between North and South Korea? **Select all that apply.** - [ ] Cultural differences - [ ] Geographical differences - [ ] Institutional differences - [ ] Historical differences
Transcribed Image Text:### Question: Which factor can explain the economic differences between North and South Korea? **Select all that apply.** - [ ] Cultural differences - [ ] Geographical differences - [ ] Institutional differences - [ ] Historical differences
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