Question

What factors determine the extent to which an economic and financial crisis in one country spills over and affects other?

Answer 1

The followings are characteristic of the low demand, low income, low level of production, high unemployment, such situation technically known as a recession in the economy.Thre are numbers of the factors determines the extent spillover effect the following are the main factors of the economy.

1. The size of the economy, for example, USA is the one strongest economy in the world other many nations directly or indirectly depends on the USA in trade suppose recession in the US results in also trading partner countries it because of the size of the economy.
2. The what sectors of the economy affected: example Example USA is experiencing the recession in the economy due low-income import of labors intensive finished goods decline it affects the other country agricultural sectors labors intensive goods manufacturing sectors affected.
3. The economic dependence on other countries.Example country depends more on another country likely to affected by recession example for crude oil India depends on Arab countries any oil crisis lads to in India recession problem.