Which of the following is a characteristic of a foreign debt crisis?
A) Narrowing current account deficit
B) Excessive expansion of domestic borrowing
C) Low relative price inflation rates
D) Asset price deflation

Question

Quizplus · Accepted Answer

Foreign debt crises tend to have common underlying macroeconomic causes: high relative price inflation rates, a widening current account deficit, excessive expansion of domestic borrowing, high government deficits, and asset price inflation (such as sharp increases in stock and property prices).

Which of the Following Is a Characteristic of a Foreign