During the 2008 and 2011 financial crises in Spain and Italy, the spread between the interest rates on 10-year bonds issued by the governments of Italy and Spain and the interest rates on 10-year bonds issued by _____ was a measure of risk.
A)Great Britain
B)Germany
C)Ireland
D)France

Question

Quizplus · Accepted Answer

The spread between the interest rates on 10-year bonds issued by the governments of Italy and Spain and the interest rates on 10-year bonds issued by Germany was a measure of risk. This is because Germany was considered the most creditworthy country in the eurozone and therefore had the lowest borrowing costs, while Italy and Spain were seen as riskier investments and had to offer higher interest rates to attract investors.

During the 2008 and 2011 Financial Crises in Spain and Italy