Financial Market Crashes

Description: This quiz is designed to test your knowledge about financial market crashes, including their causes, consequences, and historical significance.
Number of Questions: 15
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Tags: financial markets economic history financial crises
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Which event is often considered to be the first major stock market crash in the United States?

  1. The Panic of 1873

  2. The Great Depression

  3. The Black Monday Crash

  4. The Dot-com Bubble Burst


Correct Option: A
Explanation:

The Panic of 1873 was a financial crisis that occurred in the United States in 1873. It is often considered to be the first major stock market crash in the country's history.

What was the primary cause of the Black Monday Crash of 1987?

  1. A sudden drop in oil prices

  2. A computer glitch

  3. A rise in interest rates

  4. A housing market bubble


Correct Option: B
Explanation:

The Black Monday Crash of 1987 was triggered by a computer glitch that caused a large number of sell orders to be executed simultaneously. This led to a rapid decline in stock prices and a loss of over $500 billion in market value.

Which financial institution played a significant role in the subprime mortgage crisis of 2008?

  1. Bear Stearns

  2. Lehman Brothers

  3. Goldman Sachs

  4. JPMorgan Chase


Correct Option: B
Explanation:

Lehman Brothers was a major investment bank that played a significant role in the subprime mortgage crisis of 2008. The company's collapse in September 2008 was a key event in the financial crisis.

What was the name of the government program that was created in response to the financial crisis of 2008?

  1. The Troubled Asset Relief Program (TARP)

  2. The American Recovery and Reinvestment Act (ARRA)

  3. The Dodd-Frank Wall Street Reform and Consumer Protection Act

  4. The Jumpstart Our Business Startups Act (JOBS Act)


Correct Option: A
Explanation:

The Troubled Asset Relief Program (TARP) was a government program that was created in response to the financial crisis of 2008. The program was designed to purchase toxic assets from banks and other financial institutions in order to stabilize the financial system.

Which country experienced a severe financial crisis in 1997 that led to a regional economic downturn?

  1. Japan

  2. South Korea

  3. Thailand

  4. Indonesia


Correct Option: C
Explanation:

Thailand experienced a severe financial crisis in 1997 that led to a regional economic downturn. The crisis was triggered by a combination of factors, including a property bubble, a lack of foreign exchange reserves, and a high level of foreign debt.

What is the term used to describe a sudden and sharp decline in the value of a currency?

  1. Devaluation

  2. Depreciation

  3. Hyperinflation

  4. Deflation


Correct Option: A
Explanation:

Devaluation is the term used to describe a sudden and sharp decline in the value of a currency. This can be done by a government or central bank in order to make exports more competitive or to attract foreign investment.

Which financial crisis was characterized by a collapse in the housing market and a wave of foreclosures?

  1. The Great Depression

  2. The Black Monday Crash

  3. The Subprime Mortgage Crisis

  4. The Dot-com Bubble Burst


Correct Option: C
Explanation:

The Subprime Mortgage Crisis was a financial crisis that occurred in the United States in the mid-2000s. The crisis was characterized by a collapse in the housing market and a wave of foreclosures. The crisis led to a severe recession and a loss of over $10 trillion in household wealth.

What was the name of the stock market bubble that occurred in the late 1990s and early 2000s?

  1. The Dot-com Bubble

  2. The Tech Bubble

  3. The Internet Bubble

  4. The New Economy Bubble


Correct Option: A
Explanation:

The Dot-com Bubble was a stock market bubble that occurred in the late 1990s and early 2000s. The bubble was fueled by speculation in internet-related companies, many of which had little or no revenue. The bubble burst in 2000, leading to a sharp decline in stock prices and a loss of over $5 trillion in market value.

Which financial crisis was triggered by the collapse of the Long-Term Capital Management hedge fund?

  1. The Great Depression

  2. The Black Monday Crash

  3. The Russian Financial Crisis

  4. The Asian Financial Crisis


Correct Option: C
Explanation:

The Russian Financial Crisis was a financial crisis that occurred in Russia in 1998. The crisis was triggered by the collapse of the Long-Term Capital Management hedge fund, which had invested heavily in Russian government bonds. The crisis led to a sharp decline in the value of the ruble and a wave of bankruptcies.

What is the term used to describe a situation in which a country is unable to repay its debts?

  1. Default

  2. Bankruptcy

  3. Insolvency

  4. Moratorium


Correct Option: A
Explanation:

Default is the term used to describe a situation in which a country is unable to repay its debts. This can occur when a country experiences a severe economic downturn or when it is unable to generate enough revenue to cover its expenses.

Which financial crisis was characterized by a wave of bank failures and a loss of confidence in the financial system?

  1. The Great Depression

  2. The Black Monday Crash

  3. The Subprime Mortgage Crisis

  4. The Dot-com Bubble Burst


Correct Option: A
Explanation:

The Great Depression was a severe worldwide economic depression that began in the United States in the 1930s. The crisis was characterized by a wave of bank failures and a loss of confidence in the financial system. The Great Depression led to a sharp decline in output, employment, and prices.

What is the term used to describe a situation in which the value of a currency falls rapidly and uncontrollably?

  1. Hyperinflation

  2. Deflation

  3. Devaluation

  4. Depreciation


Correct Option: A
Explanation:

Hyperinflation is the term used to describe a situation in which the value of a currency falls rapidly and uncontrollably. This can occur when a government prints too much money or when there is a sudden loss of confidence in the currency.

Which financial crisis was triggered by the collapse of the Lehman Brothers investment bank?

  1. The Great Depression

  2. The Black Monday Crash

  3. The Subprime Mortgage Crisis

  4. The Dot-com Bubble Burst


Correct Option: C
Explanation:

The Subprime Mortgage Crisis was a financial crisis that occurred in the United States in the mid-2000s. The crisis was triggered by the collapse of the Lehman Brothers investment bank, which was one of the largest financial institutions in the world. The collapse of Lehman Brothers led to a loss of confidence in the financial system and a wave of bankruptcies.

What is the term used to describe a situation in which a country experiences a sustained period of economic growth?

  1. Expansion

  2. Boom

  3. Recovery

  4. Bull Market


Correct Option: A
Explanation:

Expansion is the term used to describe a situation in which a country experiences a sustained period of economic growth. This is typically characterized by an increase in output, employment, and prices.

Which financial crisis was characterized by a collapse in the value of the Japanese yen?

  1. The Great Depression

  2. The Black Monday Crash

  3. The Asian Financial Crisis

  4. The Dot-com Bubble Burst


Correct Option: C
Explanation:

The Asian Financial Crisis was a financial crisis that occurred in Asia in the late 1990s. The crisis was characterized by a collapse in the value of the Japanese yen and a wave of bankruptcies. The crisis led to a severe recession in many Asian countries.

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