The Crash

1. How does/Why would different interest rates in different countries attract investment in certain areas?

2. How does the withdrawal of investment money affect the exchange rate between currencies? Why would this be a problem for developing nations?

3. What does the phrase "self-fulfilling prophecy" mean in the context of the Asian financial crisis?

4. What is normally the relationship between risk and rates of return on investment? Did this hold up during the currency crises? Why/why not?

5. What restrictions have the International Monetary Fund and other Western nations (aka the United States) imposed on countries affected by the crash? How do these affect the economies of the countries?

6. How do crises in one part of the world sometimes affect other countries (and why?).

Back to economics 103 page