Contemporary American Society: A New Millennium — Test

Question 20 • United States History and Geography

Which statement best explains financial crises in the global economy?

Answer

A country in a financial crisis must fix the problem on its own to protect other countries.

The global nature of the economy usually prevents the rise of financial crises.

A financial crisis in one country can quickly spread to other countries.

Financial crises often last only a short time due to the global economy.

Explanation

Because countries are connected through trade, investment, and financial markets, trouble in one country can affect banks, businesses, and investors elsewhere. This can cause a financial crisis to spread quickly across borders, making “A financial crisis in one country can quickly spread to other countries” the best explanation. Global connections do not usually prevent crises, as choice D suggests.

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