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8 August, 07:29

Which of these is mos likely outcome of a financial crisis

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  1. 8 August, 09:17
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    More bankruptcies

    Explanation:

    Financial crises are caused by number of reasons such as stock market crash, liquidity shortage, over-valued assets which make investors sell off their investments hence causes panic withdrawals for customers due to rumored banking collapse etc.

    When financial crises occur, the profit due to firms will be eroded because the revenue expected by them is not coming forth. Moreso, the overall corporate profit would also be affected by the financial crises hence bring about loss and subsequent bankruptcies.

    Financial crises creates unemployment or massive lay-offs, loss of money hence increase chances of creating more bankruptcies.
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