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What was a primary trigger of the global financial crisis of 2008?
What was a primary trigger of the global financial crisis of 2008?
The global financial crisis led to a significant increase in employment across the globe.
The global financial crisis led to a significant increase in employment across the globe.
False
What kind of economic policies did governments implement in response to the global financial crisis?
What kind of economic policies did governments implement in response to the global financial crisis?
Expansionary fiscal and monetary policies
The financial crisis of 2008 resulted in a severe worldwide economic _____, the most significant since the 1930s.
The financial crisis of 2008 resulted in a severe worldwide economic _____, the most significant since the 1930s.
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Which organization provided massive loans for bailouts during the global financial crisis?
Which organization provided massive loans for bailouts during the global financial crisis?
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Match the following phases of the business cycle with their characteristics:
Match the following phases of the business cycle with their characteristics:
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International stock markets experienced a significant increase during the global financial crisis.
International stock markets experienced a significant increase during the global financial crisis.
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What was one major effect of the global financial crisis on global trade?
What was one major effect of the global financial crisis on global trade?
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What is the primary reason for the government to manage the economy?
What is the primary reason for the government to manage the economy?
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Low consumer confidence can lead to a decrease in business borrowing from financial intermediaries.
Low consumer confidence can lead to a decrease in business borrowing from financial intermediaries.
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Describe what happens in a recession regarding consumer spending and its effect on businesses.
Describe what happens in a recession regarding consumer spending and its effect on businesses.
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When banks charge higher interest rates for business loans, it is usually a measure to __________ inflation.
When banks charge higher interest rates for business loans, it is usually a measure to __________ inflation.
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Match the economic term with its correct definition:
Match the economic term with its correct definition:
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Which of the following factors could lead to low demand for imports in Australia?
Which of the following factors could lead to low demand for imports in Australia?
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Stagnant wages can contribute to a decline in government taxation income.
Stagnant wages can contribute to a decline in government taxation income.
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Explain the relationship between low consumer confidence and employment stability.
Explain the relationship between low consumer confidence and employment stability.
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Which of the following is NOT one of the five sectors in the circular flow model?
Which of the following is NOT one of the five sectors in the circular flow model?
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Businesses rely on consumers for the resources needed to produce goods and services.
Businesses rely on consumers for the resources needed to produce goods and services.
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What term is used to describe the money flowing into the economy?
What term is used to describe the money flowing into the economy?
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When consumers buy goods and services, it is known as __________.
When consumers buy goods and services, it is known as __________.
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Match the phases of the business cycle with their descriptions:
Match the phases of the business cycle with their descriptions:
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Which of the following best describes a characteristic of an economic recession?
Which of the following best describes a characteristic of an economic recession?
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The global financial crisis had a positive impact on businesses worldwide.
The global financial crisis had a positive impact on businesses worldwide.
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What is the role of financial institutions within the circular flow model?
What is the role of financial institutions within the circular flow model?
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Study Notes
The Global Financial Crisis of 2008
- The US financial system lost confidence in September 2008, leading to the bursting of the housing bubble.
- Homeowners defaulted on their mortgage payments, causing instability in the system.
- The crisis spread globally, impacting numerous countries.
- Major financial institutions went bankrupt or were acquired by other entities.
- Governments intervened with rescue packages for their financial systems.
- The GFC triggered a worldwide economic recession, surpassing any other economic downturn since the Great Depression.
- International stock markets collapsed, decreasing economic growth and trade globally.
- Unemployment rates saw a significant increase.
- The International Monetary Fund provided substantial loans to struggling countries.
- Governments implemented expansionary fiscal and monetary policies to stimulate consumer spending and business investment.
The Role of the Government
- The government plays a crucial role in protecting consumers through regulation of the financial sector.
Interdependence between Sectors in the Circular Flow of Income
- Changes in one sector can have a direct influence on other sectors within the economy.
- For example, unstable employment, low consumer confidence, and reduced spending can negatively impact businesses, leading to lower borrowing from financial institutions.
The Circular Flow of Income Model
- This model showcases the connections between consumers, businesses, financial institutions, the government, and the overseas sector.
- Injections represent money flowing into the economy (e.g., government spending, investments, exports)
- Leakages represent money flowing out of the economy (e.g., taxes, savings, imports).
Consumer and Business Sector
- The consumer and business sectors are interdependent.
- Businesses rely on consumers for purchasing goods and services, while consumers rely on businesses for income and access to goods and services.
- The household sector encompasses consumers and firms.
- Firms utilize resources provided by households to create goods and services (production).
- Households use their income to purchase goods from businesses (consumption).
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Description
Explore the events and consequences of the Global Financial Crisis of 2008. This quiz covers topics such as the housing bubble burst, government interventions, and the worldwide economic recession that followed. Test your knowledge on how this crisis reshaped the global economy.
