The primary cause of the Spanish recession following the 2008 financial crisis was a:
A)stock market crash.
B)housing bubble.
C)public debt crisis.
D)devaluation of Spain's currency, the peseta.

Question

Quizplus · Accepted Answer

The housing bubble in Spain, which saw a rapid increase in property prices fueled by easy credit, was the primary cause of the country's economic crisis. When the bubble burst, it led to a wave of mortgage defaults and a collapse in the construction industry, which had been a major driver of the Spanish economy. This, in turn, led to a rise in unemployment, a decline in consumer spending, and a contraction of the overall economy. While public debt was also a factor in the crisis, it was primarily a consequence of the recession rather than its cause. The devaluation of the peseta was not a factor in the crisis as the currency had been replaced by the euro in 2002.

The Primary Cause of the Spanish Recession Following the 2008