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contagion effect occurs when a failure of one di leads to concerns among depositors about the solvency risk of the other dis. True or False

Sagot :

Answer:

True, contagion effect occurs when a failure of one leads to concerns among depositors about the solvency risk of the other dis.

Explanation:

Contagion

The spread of an economic crisis from one market or region to another—which might take place on a national or international scale—is referred to as a contagion. Since many of the same goods and services, particularly labor and capital goods, can be employed in a variety of markets and since almost every market is connected through monetary and financial systems, contagion can happen.

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