When an international financial crisis occurs

Question

Quizplus · Accepted Answer

During an international financial crisis, financial flows can slow down, leading to a decrease in economic growth in the ailing country. This can cause difficulties in getting loans and funds for businesses and individuals. As a result, the economy can take a considerable time to recover from the crisis. Option A is incorrect as lenders would not pour money into a country experiencing a financial crisis as it is not guaranteed to yield any profits. Option B also does not apply as investors will not sell off bonds and restrict loans to aid a country's recovery but rather would withdraw their investments. Lastly, option D is incorrect as there are serious financial implications that last more than a few months.

When an International Financial Crisis Occurs