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     EduGorilla 
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    Direction: Read the passage carefully and answer the questions that follow. 

    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 tumbled 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 turn around be greeted with skepticism? Higher asset 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 placed.
    The incipient bubble is being created by government policy. In response to the global credit crunch of 2008, policymakers 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 is 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 unending 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 first half of 2009 from the same period a year earlier. Exuberance over a quick recovery which was given a boost by China’s surprisingly strong 7.9% GDP growth in the second meaner has buoyed investor sentiment not just fax stocks but also for real estate.
    Former U.S. Federal Reserve Chairman Alan Greenspan argued that bubbles could only be recognized in hand sight. But investors who have been well schooled in the dangers of bubbles over the past decade are increasingly wary that prices have risen 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. Rumors that Belling 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 than anyone thought possible over the past two years. Asia may be trading for another disheartening plunge.
    Why do experts predict that Asian policymakers will not withdraw fiscal stimulus?
    (A) The US economy is not likely to recover for a long time
    (B) Stock markets are yet to regain their former levels.
    (C) Fear of revolt by greedy citizens.

    Options :-

    1. (B) and (C)
    2. Only (C)
    3. (A) and (C)
    4. Only (B)
    5. None of these
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Reply To: Direction: Read the passage carefully and answer the questions that follow. The great fear in Asia ….
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