Economics, 3rd Edition

Part of the conditions for receiving assistance has been 

the implementation of austerity programmes which 

have further impacted on economic growth across 

 

the EU.

 

●

A debate between the benefits of austerity and the need 

to promote growth has developed which is on-going.

QUESTIONS FOR REVIEW

1 

What is meant by ‘deregulation of the financial markets’?

2 

How do ‘bubbles’ in asset prices occur?

3 

What were the main causes of the rise in asset prices in 

the run up to the financial crisis?

4 

What were the main causes of the financial crisis?

5 

Why did the financial crisis have such an impact on 

global economic activity?

6 

How did central banks respond to the financial crisis?

7 

Why did governments such as those in Greece, 

 

Spain, Ireland, Portugal and Italy experience such a  

rise in deficits and debt in the wake of the financial 

crisis?

8 

What is meant by the term ‘contagion’ in the context of 

the sovereign debt crisis?

9 

What are the main arguments for the continuation 

of austerity programmes in countries which have 

experienced sovereign debt problems?

10 

What are the main arguments against austerity 

programmes as a solution to the sovereign debt 

 

crisis?