Question

Turkey is a surprising addition to the list of rapidly developing economies; with a GDP increase of 8.5% in the year 2011 alone. However, such rapid growth leaves worries regarding possible side-effects. For instance, in 2011 Turkey's rate of inflation was well above that of its peers. Secondly, there is increasing concern regarding Turkey's growing dependency on foreign capital. A large portion of the Turkish banking system is part-owned by banks within the Eurozone. As the single currency falters, such a dependency raises questions about the stability of Turkish growth.

There are concerns that Turkey's development is at risk of faltering in the years after 2011.

A. True
B. Probably True
C. More Information Required
D. Probably False
E. False

Answer 1

The correct answer is B. The concerns regarding Turkey's economic growth post-2011 are well-founded due to issues of high inflation, dependence on foreign capital, and a history of defaults which make the assessment that Turkey's development is at risk of faltering after 2011 Probably True.

Step-by-step explanation:

Considering the economic challenges faced by Turkey, namely inflation, dependency on foreign capital, and concerns over the stability of the Turkish lira, it would appear that the concerns about Turkey's development faltering after 2011 are justified. These issues are underscored by the country's history of defaults and large budget deficits, which amplify the risk of inflation and the inability to repay international loans.

In particular, the reliance on foreign investment that can be rapidly withdrawn, as happened in East Asian countries during the 1997-1998 crisis, is a significant vulnerability. High rates of inflation, concerns about debt repayment, and potential investor retreat all contribute to the risk of a less optimistic outlook for the economy. Therefore, the assertion that Turkey's development is at risk of faltering in the years after 2011 is Probably True based on these economic indicators and historical patterns.