The key difference between financial crises in emerging markets and those in industrialized countries is that emerging markets experience:
A)capital flight.
B)an asset-bubble collapse.
C)a liquidity crisis.
D)a credit crunch.

Question

Quizplus · Accepted Answer

Emerging markets often experience capital flight during financial crises, as investors sell off their assets and withdraw funds from the country. This can lead to a rapid depreciation of the country's currency and exacerbate the crisis. While industrialized countries may also experience capital flight during a crisis, it is generally less severe and does not impact the currency as greatly. Asset-bubble collapses, liquidity crises, and credit crunches can also occur in both types of countries during a financial crisis, but capital flight is a distinguishing characteristic of emerging market crises.

The Key Difference Between Financial Crises in Emerging Markets and Those