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Chapter 10: Q 34. (page 267)

If a country is a big exporter, is it more exposed to

global financial crises?

Short Answer

Expert verified

The country may be more exposed to financial crisis.

Step by step solution

01

Step 1. Definition

A financial crisis occurs when financial instruments and assets deplete steeply in value.

02

Step 2.

When a country is an exporter it means a high level of output and employment but also it means that there is an outflow of financial capital as the country exports more.

This means that a large part of the trade is international so the country is more exposed to global or international financial crises.

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