Question

Which statement best explains financial crises in the global economy?
The global nature of the economy usually prevents the rise of financial crises.
A country in a financial crisis must fix the problem on its own to protect other countries.
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.

Answer 1

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

Explanation: Global trade, financial linkages, cross-border lending and investment, and investor confidence create contagion channels so shocks in one country can transmit rapidly to others. The other statements are incorrect because global integration doesn't prevent crises, countries can't always fix problems in isolation, and crises can be prolonged rather than only short-lived.