A financial crisis occurs when: A. there are predictable market disruptions. B. capital is allocated to its most productive uses. C. a particularly large disruption to information flows occurs in financial markets. D. financial frictions decrease sharply.

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9 June, 11:16

A financial crisis occurs when: A. there are predictable market disruptions. B. capital is allocated to its most productive uses. C. a particularly large disruption to information flows occurs in financial markets. D. financial frictions decrease sharply.

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Kaylyn · Answer 1

C. a particularly large disruption to information flows occurs in financial markets.

Explanation:

A financial crisis, in general, is said to occur when the institution or assets are overvalued and are exacerbated by irrational investors. Such a large and sudden loss of the financial nominal values or the period of recession. The currency crisis is also called the devaluation crisis and is the most common type of financial crisis. and maybe due to the rise in the exchange rate upwards and downwards. Borrowing financial assets can also contribute to the final crisis.