Discussion

Explanation:

Option 1 is supported by “free flow of short-term capital....would produce not growth but instability...”
Option 2 is supported by the first three lines of the passage.
Option 3 is supported by the unclear information provided in the passage on the success of the economic policies of Asian countries. The last paragraph only talks about the effects of the economic policies of the Asian countries but what led to their success is not clear.
Option 4 is supported by the sentence “Nor do markets, by themselves....feature of development.” The statement suggests that it is the responsibility of the government to absorb new technology in order to close the knowledge gap and increase market efficiency.
Option 5 cannot be inferred because the passage says that the question is whether government can improve matters of economic efficiency which affected due to imperfect information. It cannot be inferred if the government intervention will cause the eradication of imperfect information completely.
Hence, the correct answer is option 5.

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