Carefully explain two reasons why domestic crises can become international crises

What will be an ideal response?

Some crises are contagious. Direct linkages between economies can sometimes spread a crisis that begins in one economy and turn it into an international crisis (example: 2007 subprime crisis). Sometimes, two or more countries face similar financial crises because they share
a common set of economic fundamentals (example: Great Depression). Because economies share the same fundamentals, they are affected similarly by shocks.

Economics

You might also like to view...

Firms face trade-offs in production, including decisions related to:

A how much of a particular product to produce. B which products to produce. C the best way to produce a given amount of output. D all of the above

Economics

Which of the following statements about the budget deficit is TRUE?

A) It is equal to the public debt. B) It is a stock variable. C) It is a flow variable. D) none of the above

Economics