8.6

Question 1

What are negative effects of great interconnectedness between countries?

Answer 1

Ease of travel led to rapid spread of infectious disease globally
Widespread use of e-communication -> internet fraud, identity theft easier.

Question 2

Why did the Global financial crisis occur?

Answer 2

House prices became lower than the value of their mortgage
People stopped making the mortgage payments
US banks stopped lending so much money
Other banks around the world stopped lending money
The world went into recession.
The Australian government avoided it by pumping money into the economy.