Author Question: How is a financial crisis like a power blackout? What will be an ideal ... (Read 23 times)

schs14 · **on:** Jun 30, 2018

How is a financial crisis like a power blackout?

What will be an ideal response?

Question 2

An economy without monetary exchange is called

A) a primitive economy.
B) a barter economy.
C) a socialist economy.
D) an autarky economy.

Ksanderson1296 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A blackout occurs when a breakdown at one or more points in the power grid causes strain at other points. As these fail, the entire system can collapse. The failure of a single financial institution disrupts the functioning of others, with an inherent tendency for the weakening to spread and intensify. The deterioration of financial institutions' balance sheets, in particular, is contagious. Restoring power requires both removing the initial cause (e.g., power lines downed in a storm) and reestablishing normal operations at all the points affected indirectly.

Answer to Question 2

B