EQ3 Global debt and 2008 financial crisis Flashcards
Which countries have the highest national debts?
USA and EU states
Countries like Italy and Venezuela also have high debt-to-GDP ratios.
What is the debt-to-GDP ratio of the US?
134%
What is the debt-to-GDP ratio of Italy?
156%
What is the debt-to-GDP ratio of Venezuela?
304%
What global events led to a recession and decline in economies?
The Financial Crisis of 2008 and Covid
Which major financial crisis impacted the US and EU in 2008?
The 2008 financial crisis
It resulted in widespread economic downturns in many western countries.
What caused the 2008 financial crisis?
Risky mortgages and housing bubble collapse
US banks issued poor credit mortgages that led to an unsustainable housing market.
What was a significant consequence of the 2008 financial crisis?
Bank failures and global recession
Major institutions like Lehman Brothers collapsed, triggering a banking crisis.
What triggered the EU debt crises and austerity measures?
High national debts in several European countries
Greece was particularly affected, requiring bailouts and spending cuts.
What was the US government’s response to stabilize the economy after the 2008 crisis?
$700 billion in loans and $7 trillion from the Federal Reserve
These measures aimed to stabilize the financial system.
How much did the UK government spend to rescue banks during the 2008 crisis?
£137 billion
This included support for major banks like Lloyds.
What was one impact of the government response to the 2008 financial crisis?
Prevented economic collapse but increased government debt
This led to subsequent austerity measures. (cuts in gov services)
What was a social consequence of the austerity measures following the financial crisis? Talk about covid
Further wealth inequality
The covid pandemic exacerbated these inequalities, with some employers receiving grants.
Fill in the blank: The 2008 financial crisis was largely caused by _______.
risky mortgages
These were given to borrowers with poor credit, creating a housing bubble.
