Which one among the following led to the Greece economic crisis 2010 ?

examrobotsa's picture
Q: 85 (NDA-I/2011)

Which one among the following led to the Greece economic crisis 2010 ?

question_subject: 

Economics

question_exam: 

NDA-I

stats: 

0,56,75,23,16,56,36

keywords: 

{'economic crisis': [0, 1, 0, 1], 'greece': [2, 2, 7, 8], 'excessive borrowing': [0, 0, 0, 1], 'political unrest': [1, 0, 0, 1], 'euro': [0, 3, 0, 3], 'sudden depreciation': [0, 0, 0, 1], 'unrestricted spending': [0, 0, 0, 1], 'cheap loans': [0, 0, 0, 1], 'foreign capital': [0, 0, 0, 3], 'imf': [0, 1, 2, 0]}

The correct answer is option 3: unrestricted spending and cheap loans. The Greece economic crisis in 2010 was mainly caused by the irresponsible spending habits of the Greek government and the availability of cheap loans. The government, over a period of time, spent way more than it could afford, leading to a significant increase in its debt levels. This excessive borrowing and unrestricted spending created an unsustainable economic situation for Greece.

Additionally, these spending habits were fueled by the availability of cheap loans from other countries and international financial institutions. The Greek government took advantage of this situation and borrowed large sums of money without considering the long-term consequences. However, when the economic crisis hit, Greece found it difficult to repay its debt and had to seek financial assistance from international organizations like the International Monetary Fund (IMF).

While the other options mentioned in the question could have contributed to the crisis indirectly, such as the depreciation of the Euro or the outflow of foreign capital due to political unrest, they were not the main factors that directly led to the economic crisis in Greece.