Read the passage given below and solve the questions based on it.
The great fear in Asia a short while ago was that the region would suffer through the wealth destruction already taking place in the U.S. as a result of the financial crisis. Stock markets turn bled as exports plunged and economic growth deteriorated. Lofty property prices in China and elsewhere looked set to bust as credit tightened and buyers evaporated. But with surprising speed, fear in Asia swung back to greed as the region shows signs of recovery and property and stock prices are soaring in many parts of Asia.
Why should this sharp Asian turnaround be greeted with skepticism? Higher assets prices mean households feel wealthier and better able to spend, which could further fuel the region’s nascent rebound. But just as easily. Asia could soon find itself saddled with overheated markets similar to the U.S. housing market. In short the world has not changed, it has just moved places.
The incipient bubble is being created by government policy. In response to the global credit crunch of 2008, policy makers in Asia slashed interest rates and flooded financial sectors with cash in frantic attempts to keep loans flowing and economies growing. These steps were logical for central bankers striving to reverse a deepening economic crisis. But there’s evidence that there is too much easy money around it’s winding up in stocks and real estate, pushing prices up too far and too fast for the underlying economic fundamentals. Much of the concern is focused on China, where government stimulus efforts have been large and effective. Money in China has been especially easy to find. Aggregate new bank lending surged 201% in the first half of 2009 from the same period a year earlier, to nearly $1.1 trillion. Exuberance over a quick recovery which was given a boost by China’s surprisingly strong 7.9% GDP growth in the second quarter has buoyed investor sentiment not just for stocks but also for real estate.
Former U.S. Federal Reserve Chairman Alan Greenspan argued that bubble could only be recognized in hindsight. But investors who have been well schooled in the dangers of bubbles over the past decade are increasingly wary that prices have resent too far, and that the slightest bit of negative economic news could knock markets for a loop. These fears are compounded by the possibility that Asia’s central bankers will begin taking steps to shut off the money. Rumours that Beijing was on the verge of tightening credit led to Shanghai stocks plunging 5%. Yet many economists believe that “there is close to a zero possibility that the Chinese government will do anything this year that constitutes tightening.” And without a major shift in thinking, the easy money conditions will stay in place. In a global economy that has produced more dramatic ups and downs that anyone thought possible over the past two years, Asia may be heading for another disheartening plunge.
A- Reluctance of Asian governments to taper off the economic stimulus. B- Greed of Asian investors causing them to trade stocks of American companies at high prices. C- Inflated real estate prices in Asian countries.
To which of the following has the author attributed the 2008 Asian financial crisis?
A- Reluctance of Asian governments to taper off the economic stimulus.
B- Greed of Asian investors causing them to trade stocks of American companies at high prices.
C- Inflated real estate prices in Asian countries.