Final answer:
Japan faced economic risk prior to its stock market crash primarily because the country relied heavily on exports, making it susceptible to external market conditions and protectionist policies.
Step-by-step explanation:
The country that faced economic risk before its stock market crash due to strong economic growth was Japan. One of the main reasons Japan faced economic risk was because the country relied heavily on exports. This heavy reliance on trade, especially with the United States, made Japan's economy vulnerable to external market conditions such as protectionism and tariffs on foreign imports. Additionally, as an island nation with limited natural resources and an aging population, Japan found it challenging to ensure stable supplies of essential goods like oil and food without a strong export market.
Moreover, the situation in the early 2000s showed that Japan experienced extremely slow growth, with its economy dipping in and out of recession. Despite aggressive measures like lowering interest rates and expanding the money supply, these steps had little effect on stimulating aggregate demand. This demonstrates the multifaceted challenges Japan faced, including the need for sustainable economic policies and the risk posed by heavy reliance on exports.